State Consumer Disputes Redressal Commission
Mahesh Chand Verma & Oth. vs M/S Grand Infra Build Pvt Ltd on 26 October, 2023
Cause Title/Judgement-Entry STATE CONSUMER DISPUTES REDRESSAL COMMISSION, UP C-1 Vikrant Khand 1 (Near Shaheed Path), Gomti Nagar Lucknow-226010 Complaint Case No. CC/197/2015 ( Date of Filing : 07 Sep 2015 ) 1. Mahesh Chand Verma & Oth. Meerut ...........Complainant(s) Versus 1. M/S Grand Infra Build Pvt Ltd Meerut ............Opp.Party(s) BEFORE: HON'BLE MR. Rajendra Singh PRESIDING MEMBER HON'BLE MR. Vikas Saxena JUDICIAL MEMBER PRESENT: Dated : 26 Oct 2023 Final Order / Judgement Reserved State Consumer Disputes Redressal Commission U.P. Lucknow. Complaint Case No.197 of 2015 1- Mahesh Chand Verma s/o Jai Bhagwan Verma, 2- Mrs. Suman Lata w/o Mr. Mahesh Chand, R/o 497/11, Phool Bag Colony, Meerut. ...Complainants. Versus M/s Grand India Build Tech Private Limited, having its registered office as Gokul Dham Colony, Darawali Geshupur, Meerut through its Director, Shri Gagan Mittal s/o Shri Anil Mittal, R/o A49, Samrat Palace, Meerut. ...Opposite party. Present:- 1- Hon'ble Sri Rajendra Singh, Member. 2- Hon'ble Sri Vikas Saxena, Member Sri Anuj Dayal, Advocate for the complainants. None for the opposite party. Date : 1.12.2023 JUDGMENT
Sri Rajendra Singh, Member- This complaint has been filed by complainant under section 17 of the Consumer Protection Act, 1986.
The brief facts of the complainant are that, that the opposite party is the director of M/s Grand Infrabuild Tech Private Limited, which is engaged in the construction and building business. The opposite party issued an advertisement of the multistoried residential apartment with the name and style "Gokul Dham" at Gram Datawali-Gesupur, Meerut. As per the advertisement various lucrative facilities and attractive offers were proposed along with the photographs. Moreover it was also provided that there were four kinds of flats which are 4BHK, 3BHK, 2BHK and 1BHK along with their 3D images. The complainants were searching for a suitable flat which had all the facilities and situated on the main road for proper connection with other cities. The complainants came across the advertisement of Gokul Dham apartment which was meeting all their requirement. The complainants visited the construction site of the Gokul Dham apartment in October 2013 and found that the construction quality good and moreover the size of apartment was also satisfactory.
The office of the opposite party informed the complainant that almost all the flats in the aforesaid apartment were already booked and if they do not book or purchase the flat within one month, no flat will be available in the discounted offer price. The office of the opposite party further informed that only one flat in the fourth floor is left meeting the requirements of the complainants. The office of the opposite party also assured that the possession of the apartment will be delivered by February-March 2014. Since the complainant were in need of a suitable apartment therefore he decided to purchase the flat on fourth floor bearing flat number 301 in block/tower B in the said apartment. On the same day the complainant met with Shri Gagan Mittal who also promised that the possession of the flat will be delivered in February-March 2014 as the construction was in full swing. The opposite party quoted the price of the aforesaid flat to be ₹ 24 lakhs excluding stamp duty. The complainant requested to reduce the price but the opposite party did not agree and thereafter the complainant deposited ₹ 7 lakhs in cash as initial/booking amount and moreover the opposite party asked the complainant to execute the sale deed in the first week of March 2 014. However the construction of the aforesaid flat was not complete in the first week of March and 2014. When the complainant questioned about it to the opposite party, the opposite party assured that the construction would be completed and possession would be delivered within three months and asked to execute the sale deed within two days or the complainant had to pay more price for the flat.
Having no other option the complainant agreed for the execution of sale deed and accordingly on 07.03.2014 the sale deed was executed by opposite party in favour of the complainants which portrayed that possession has already been delivered to the complainants but in fact the flats were under construction. The complainant paid huge amount of money of ₹ 24 lakhs after availing housing loan facility of ₹ 17 lakhs From State Bank of Hyderabad and further paid ₹ 168,000/- as a stamp duty. After execution of the sale deed the complainants were hopeful that the possession of the purchased flat would be delivered by May 2014 so they did not visit the site till May 2014. When the complainants visited the project site in June 2014, they were shocked to see that no further construction had taken place and it was in the same situation as it was for months before. It is only on the basis of the assurances given by the opposite party, the complainants hurriedly agreed for execution of sale deed and paid entire consideration amount but the promises and assurances were found to be false. The complainants tried to contact the opposite party, the opposite party informed that there was shortage of labour and due to certain unavoidable circumstances, the construction could not be completed within time. The opposite party again assured that the possession will be delivered to the complainants by the end of the year 2014. The complainant had no other option but to wait for the possession as complainant no.1 had availed a housing loan facility and has invested all his savings for the purchase of the flat. It is pertinent to mention here that the complainant were continuously repaying the loan by paying EMI without any default and the complainant submitted for another six months.
When the complainant visited the project site in January 2015, they found that although the construction was going on but in a very low pace. When the complainants tried to contact opposite party, they were informed that the opposite parties are not coming to the project site since very long. Now it was clear that the opposite party was trying to cheat the complainants and has usurped the money of the complainant and was delaying delivery of possession of flat for last one year. The complainants are also click the photographs of the flat which was purchased by them which clearly showed that the construction was still not complete and the interior construction was also of inferior quality. There was deficiency in service on the part of the opposite party. The opposite party failed to deliver possession in time whereas the sale deed was executed way back in March 2 014 which clearly stated that the possession has already been delivered.
Having no other option, ultimately the complainant is decided to take back the money deposited by them from the opposite party. In June 2015 the complainant requested the opposite party to return the money but to the surprise of complainants, the attitude of the opposite party got completely changed. The opposite party said that they would never return the money and they had to wait till the completion of construction even though it may take another year. Having no other option, the complainants sent a legal notice to the opposite party through their advocate Mr. Shashank on 15.06.205 requesting the opposite party to return the consideration amount of the flat with interest within 15 days from the date of receipt of aforesaid notice. No reply has been received by the complainants which clearly shows that the opposite party does not want to return the consideration amount of the flat. The complainants have also suffered mental agony, stress and harassment and has further faced the humiliation in society for which the complainant are supposed to be compensated. Therefore the complainants filed this complaint for the following reliefs :
The opposite party be directed to return the consideration amount of flat that is ₹ 24 lakhs and ₹ 168,000/- of stamp duty at the rate of 18% per annum from the date of sale deed the party may be further directed to pay ₹ 10 lakhs as compensation for the expenditure in availing loan facility and compensation for the loss of saving/income.
The opposite party may further be directed to pay ₹ 5 lakhs as compensation to the complainants are for suffering mental agony and harassment.
Issue any other order or direction which this Hon'ble commission deems just and proper in the circumstances of the instant case.
Allow the present complaint with cost.
As per order sheet dated 29.03.2016, Mr. Siddharth Sinha has filed his Vakalatnama for the opposite party. As per order sheet dated 19.07.2016, it has been directed to proceed ex- parte against opposite party. As per order sheet dated 07.02.2017, Advocate Mr. Kumar Sambhav appeared on behalf of opposite party and filed his Vakalatnama. As per order sheet dated 04.05.2018 the opposite party's counsel presented an application for taking the written statement on record. There is no specific order regarding taking of written statement on record because it has been filed after 30/45 days. If written statement is filed after 30/45 days, it cannot be taken on record and thereafter the opposite party may not file any evidence except to argue the case at the time of argument. In this regard the following judgment of the Hon'ble Supreme Court is quoted herein-below.
A Constitutional Bench ( 5 JJ ) of the Hon'ble Supreme Court In the Case of New India Assurance Complainant Vs Hilli Multipurpose Cold Storage Private Limited, Civil Appeal no 10941 -10942 of 2013 along with other many related Civil Appeals( judgment 04.03.2020 ) held ;
"The reference made to this Constitution Bench relates to the grant of time for filing response to a complaint under the provisions of the Consumer Protection Act, 1986 (for short 'the Act').
The first question referred is as to whether Section 13(2) (a) of the Consumer Protection Act, which provides for the respondent/opposite party filing its response to the complaint within 30 days or such extended period not exceeding 15 days, should be read as mandatory or directory; i.e. whether the District Forum has power to extend the time for filing the response beyond the period of 15 days, in addition to 30 days.
The second question which is referred is as to what would be the commencing point of limitation of 30 days stipulated under the aforesaid Section.
The first question was referred by a two Judges bench of this Court vide an order dated 11.02.2016 passed in Civil Appeal No (s) 10831084 of 2016, M/S Bhasin Infotech and Infrastructure Pvt Ltd Vs M/S Grand Venezia Buyers Association ( Reg), the relevant portion of which is as under :
"there is an apparent conflict between the decision of this Court in Topline Shoes Limited vs. Corporation Bank [(2002)6 SCC 33], Kailash vs Nankhu [(2005)4 SCC 480], Salem advocate Bar Association Vs. Union of India [(2005) 6 SCC 344] on the one hand and J J Merchan & Ors. vs. Shrinath Chaturvedi [(2002) 6 SCC 635)] and NIA Vs. Hilli Multipurpose Cold Storage [2014 AIOL 4615] on the other in so far as the power of the courts to extend time for filing of Written Statement/reply to a complaint is concerned. The earlier mentioned line of decision take the view that the relevant provisions including those of Order 8 Rule 1 of the Civil Procedure Code 1908 are directory in nature and the Courts concerned have the power to extend time for filing the written statement. The second line of decisions which are also of coordinate Benches however takes a contrary view and hold that when it comes to power of the Consumer Fora to extend the time for filing a reply there is no such power. Since the question that falls for determination here often arises before the Consumer Fora and Commissions all over the country it will be more appropriate if the conflict is resolved by an authoritative judgment. Further since the conflict is between Benches comprising three Judges we deem it fit to refer these appeals to a five - Judge Bench to resolve the conflict once and for all. While we do so we are mindful of the fact that in the ordinary course a two - Judge Bench ought to make a reference to a three - Judge Bench in the first place but in the facts and circumstances of the case and keeping in view the fact that the conflict is between coordinate benches That comprising three Judges a reference to 3 Judges may not suffice"
The Hon'ble Supreme Court in para 41 of the judgment has held:
"To conclude, we hold that our answer to the first question is that The District Forum has no power to extend the time for filing the response to the complainant beyond the period of 15 days in addition to 30 days as envisaged under section 13 of the Consumer Protection Act; and the answer to the second question is that the commencing point of limitation of 30 days under Section 13 of the Consumer Protection Act would be from the date of receipt of the notice accompanied with the complainant by the opposite party and not mere receipt of the notice of the complainant."
The Hon'ble Supreme Court in para 40 of the judgment has held ".............. we may, however, clarified that the objection of not having received a copy of the complaint along with the notice should be raised on the first date itself and not thereafter, otherwise permitted to be raised at any point later on defeat the very purpose of the Act, which is to provide simple and speedy Redressal of consumer disputes."
[Section 38 of the Consumer Protection Act 2019 has also the same time limit to file written statement. It is quoted hereinbelow ;
38. Procedure on admission of complaint -(1) the District Commission shall , on admission of a complaint, or in respect of cases referred for mediation on failure of the agreement by mediation proceed with such complaint.
(2) were the complainant relates to any goods, the discussion That shall -
(a) referral copy of the admitted complaint, within 21 days from the date of its admission to the opposite party mentioned in the complaint directing him to give his version of the case within a period of 30 days or such extended period not exceeding 15 days as may be granted by it ; ] According to section 49 of The Consumer Protection Act 2019, the provisions relating to complainants under section 35, 36, 37, 38 and 39 shall, with such modifications as may be necessary, be applicable to the disposal of complaint by the State Commission.
So in this case the written statement has been filed beyond the prescribed period as mentioned in section 49 of the Consumer Protection Act 2019. As per the Act and as per the judgment of the Hon'ble Supreme Court (Constitutional Bench) this written statement is not liable to be taken on record so it will be not the part of the record.
In the case of ARN Infrastructure India Limited Vs. Hara Prasad Ghosh, SC (civil appeal diary no.31182/2023, Jt dated 04.09.2023) the facts are as follows :
A complaint under original jurisdiction was filed before the NCDRC seeking return of deposit from the Opposite Parties. In the said case, the Opposite Parties did not file their Written Version within the statutory timeline prescribed. While so, at the time of hearing final arguments, the Opposite Parties entered appearance through an advocate and sought an adjournment to make final arguments in the case.
The NCDRC rejected the said request on the ground that the Written Version was not filed within the statutory period. The NCDRC allowed the complaint by hearing only the Complainant on merits. An application was filed by the Opposite Parties to recall the aforesaid order. The said application was also dismissed by the NCDRC against which a civil appeal was filed before the Hon'ble Supreme Court which is under discussion here.
The issue before the Hon'ble Supreme Court was whether the Opposite Parties are entitled to make final arguments even when the Written Version was not filed. The Hon'ble Supreme Court held that the Opposite Parties have a right to make final arguments even if the Written Version was not filed. The Apex Court observed that hearing only the Complainant on merits when the Opposite Parties intended to make submissions is violative of the principles of natural justice.
Here in this case and the opposite parties counsel did not appear and we heard Ms. Reshu Sharma, Jr. of Advocate Mr. Anuj Dayal. We have perused the pleadings evidences and documents on record.
In this case it is clear that the complainants have deposited Rs.7 lakhs as initial/booking amount. In total the complainants have deposited Rs.24 lakhs and Rs.168,000.00 towards stamp duty. The sale deed was executed under pressure of the opposite party and the construction was not complete. The sale deed has been executed in the first week of March 2014. We have seen the copy of the sale deed which is executed on 06.03.2014. In the sale deed the consideration amount is written as Rs.24 lakhs and stamp duty as Rs.168,000/- so it is clear that whatever has been said by the complainant is correct. They did not get the possession of the flat and now they want to get their money which has been given to the opposite party.
First we see the object of the consumer protection act.
The main objectives of consumer protection act?
The Consumer Protection Act, came into existence and implemented in 1986, provides Consumer Rights to prevent consumers from fraud or specified unfair practices. It safeguards and encourages and gives an opportunity to consumers to speak against insufficiency and flaws in goods and services. If traders, manufacturers and distributors follow any foul trade, this act protects their rights as a consumer.
On which products are these right applicable?
This Protection Act covers entire goods and services of all sectors that are public, private, or cooperative sectors, except those exempted by the central government. The act provides a floor for a consumer where one can file their complaint against the product and the forum takes an action against the concerned supplier and compensation is granted to the consumer for the inconvenience he/she has encountered.
Objectives of consumer protection act To Provide better and all round protection to consumer.
To Provide machinery for the speedy redressal of the grievances.
To Create framework for consumers to seek redressal.
To Provide rights to consumers.
To Safeguarde rights of Consumers.
Let us know more about the rights and responsiblities of consumer Consumer Rights Listed below are the Rights of the Consumer Right to Safety- Before buying, a consumer can examine on the quality and guarantee of the goods and opt for ISI or AGMARK products.
Right to Choose- Consumer must have the right to choose from a variety and number of goods and in a competitive price Right to be informed- The buyers must be provided with complete information with all the necessary and adequate details of the product, make her/him act wise, and change the buying decision.
Right to Consumer Education- The consumer must be aware of his/her rights and avoid exploitation.
Right to be heard- The consumer will get due attention to express their grievances at a suitable platform.
Right to seek compensation- The consumer has the right to seek or ask for redressal against unfair and inhumane practices or exploitation of the consumer.
Consumer Responsibilities Responsibility to be aware - A consumer has to be careful of the safety and quality of products and services before purchasing.
Responsibility to think independently- Consumer should be well bothered about what they want and need and hence make independent choices.
Responsibility to speak out- The buyer should be fearless to speak out their problems and tell to traders what they exactly want Responsibility to complain- It becomes the consumer's responsibility to express and file a complaint about their dissatisfaction with goods or services in a sincere and fair manner.
Responsibility to be an Ethical Consumer- Consumer must be fair and not engage themselves with any deceptive practice.
The Consumer Protection Act 1986 was enacted to provide for better protection of the interests of consumers and for that purpose to make provision for the establishment of Consumers Councils and other authorities for the settlement of consumers' disputes and for matters connected therewith (Preamble).
The Act Inter alia, seeks to promote and protect the rights of consumers such as --
(1) right to be protected against marketing of goods which are hazardous to life and property;
(2) right to be informed about the quality, quantity, potency, purity, standard and price of goods to protect the consumer against unfair tradepractices;
(3) right to be assured, wherever possible, access to variety of goods at competitive prices;
(4) right to be heard and to assured that customers' interests will receive due consideration at appropriate forums.
(5) Right to seek redressal against unfair practices or unscrupulous exploitation of consumers; and (6) Right to consumer education The objects are sought to be promoted and protected by the Consumer Protection Councils to be established at the Central and State levels.
The Act applies to all goods and services, except if otherwise provided by the Central Government by Notification. To provide speedy and simple redressal of consumer disputes, a quasi judicial machinery is set up at the District, State and Central levels. The three tier system of quasi judicial bodies will observe the principle of natural justice and are empowered to give relief of a specific nature and to award, wherever appropriate, compensation to consumers. Penalties for non-compliance of the orders given by the quasi judicial bodies have also been provided.
Thus the Consumer Protection Act is to serve the interests of the consumers. Consumer education and redressal of consumers' grievances are the two aspects of the Act. It makes good the loss a consumer suffers and increases the feeling of responsibility of the manufacturer, trader, supplier or businessman.
The provisions of the Act have to be construed in favor of the consumer to achieve the purpose of enactment as it is social benefit oriented legislation. The primary duty of the Court while construing the provisions of such an Act is to adopt a constructive approach subject to that it should not do violence to the language of the provisions and not contrary to attempted objective of the enactment.
Extent of Consumer Protection:
While other legislations may be either punitive or preventive, the Consumer Protection Act compensates the consumer. The provisions of the Act are in addition to and not in derogation of the provisions of any law at the time being in force (Sec 3). In Maine Container Services South Pvt Ltd v Go Garments 1998 (3) SCC 247 it has been held that the Contract Act applies to all litigants before the Commissioner under the Consumers Protection Act. Passengers traveling in train suffering injuries and loss of Jewelry as a result of assault by unruly crowd are eligible for filing of complaint before State Commission is maintainable notwithstanding the provisions of sections 100 and 103 of Railways Act, 1889. The Consumer Protection Act therefore gives the consumer an additional remedy besides those which may be available under other existing laws. Existence of an arbitration clause in the agreement is no bar to the entertainment of complaint by the Redressal Agency as the remedy under the Act is in addition to the provisions of any other law. However, the Consumer Forums under the Act have not taken over the jurisdiction of civil Courts. If the dispute between the parties is pending in Civil Court no Consumer Forum will adjudicate the dispute. Similarly if evidence be laid by the parties to the dispute is voluminous or complicated the parties will be referred to the appropriate Civil Court.
Consumers Protection Act, thus enshrines the rights of a consumer to be informed about the quality, quantity, potency, price etc., of the goods to be protected against unfair trade practices, to seek inexpensive and expeditious redressal of grievances before the Consumer Forums. Consumer Protection Act is a benevolent piece of legislation to protect a large body of consumers from exploitation.
With the passage of time, the populace of the country is on hike and so are their opinions. Their opinion forms the basis for their interpretation, it may be a good or a bad interpretation. What would happen in the situation where people starting interpreting the laws? We might be flooded with several interpretations. The interpretations will be in such huge number that the laws will become unclear. This is the reason why lawmakers, while making the law, formulate itin accordance with the aim, set out by them, before penning down the legislations. The aim of any legislation defines the basis of the act. It becomes the ground norm of the act, based upon which the judiciary interprets the disputed texts.
The aim of any act forms the indispensable element, because it acts as the cord that delivers the real intention of the legislators behind the act. Whenever there is clash between two legislations, it is the aim of the legislation which makes the judges to derive at the endpoint in deciding which law has the superseding effect. It is through the doctrine of pith and substance that judges are able to derive at the major inclination towards one act over another act. This inclination is decided on the basis of the aim/goal of the act and the facts of that particular case.
CONSUMER PROTECTION ACT (CPA) The beneficial legislation of Consumer Protection Act aims at reducing the grievances of the all classes of customers by providing them the preferential treatment. According to the Consumer Protection Act, the consumer dispute is the entity where the consumer/ customers have been given the convenient safeguards against ample exploitation like bad customer service, faulty goods or any unfair trade practices. The interest of the customers is protected by setting up, the three tier quasi-judicial consumer Redressal machinery which are at national, state and district levels as per section 9 of Consumer Protection Act. The Consumer Protection Act, 1986 (CPA) has been enacted in light of certain concerns related to public policy and the benefit of consumer.
So the main object of the Consumer Protection Act is to safeguard the consumer against deficiency of service, unfair trade practice, inexpensive and expeditious redressal of grievances before the Consumer Forums. It is also clear that this act is not in derogation of any act but it is in addition of other act.
In the case of Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra,[Civil Appeal No. 3182 of 2019 @ SLP (C) No(S). 1795 of 2017]; 2019 Latest Case law 299 SC Dr. Dhananjaya Y. Chandrachud, J.
"This appeal arises from the judgment dated 21 November 2016 of the National Consumer Disputes Redressal Commission1. A Buyer's Agreement dated 2 July 2007 was entered into between the appellant and the respondent. The respondent paid an amount of Rs 39,29,280 in 2006 in terms of a letter of allotment dated 20 September 2006. The agreement between the parties envisaged that the appellant would hand over possession of a Row House to the respondent by 31 December 2008 with a grace period of a further six months ending on 30 June 2009.
The respondent filed a consumer complaint before the West Bengal State Consumer Disputes Redressal Commission2 in 2011 1 "NCDRC" "SCDRC" 2 praying for possession of the Row House and in the alternative for the refund of the amount paid to the developer together with interest at 12% per annum. Compensation of Rs 20 lakhs was also claimed. The SCDRC allowed the complaint by directing the appellant to refund the moneys paid by the respondent together with interest at 12% per annum and compensation of Rs 5 lakhs. The NCDRC has modified this order by reducing the compensation from Rs 5 lakhs to Rs 2 lakhs. Mr. Ravinder Narain, learned counsel appearing on behalf of the appellant submits that the primary relief which was sought in the consumer complaint was for delivery of possession. According to the appellant, the completion certificate was received on 29 March 2016, which was intimated to the respondent on 11 April 2016.
Moreover, before the SCDRC, in its written submissions, the appellant had offered possession of the Row House to the respondent. It has also been stated that in a complaint which was filed by an association representing the allottees of 161 Row houses, a settlement was arrived on 11 September 2018 before the NCDRC specifying the date on which possession would be handed over together with interest at 6% per annum instead of 4% as mentioned in the Buyers' Agreement. It was urged that the developer having made a substantial investment in terms of the agreement, a direction for refund is not warranted. It has also been urged that the SCDRC in the course of its decision erroneously observed that the developer was unable to fulfill its obligation to complete the construction within the agreed period and it was not certain when the Row house would be handed over. It was urged that this observation by the SCDRC is contrary to the record since before it, a specific offer of possession was made."
"Interestingly, where the buyer is in default, the agreement stipulates that interest at the rate of 18 per cent from the date of default until the date of payment would be charged for a period of two months, failing which the allotment would be cancelled by deducting 5% of the entire value of the property. The agreement was evidently one sided. For a default on the part of the buyer, interest at the rate of 18% was liable to be charged. However, a default on the part of the developer in handing over possession would make him liable to pay interest only at the savings bank rate prescribed by the SBI. There is merit in the submission which has been urged by the buyer that the agreement was one sided.
The clause which has been extracted in the earlier part of this order will not preclude the right and remedy available to the buyer to claim reasonable interest or, as the case may be, compensation. The essential aspect of the case which is required to be analysed is whether the buyer was entitled to seek a refund or was estopped from doing so, having claimed compensation as the primary relief in the consumer complaint.
The Buyer's Agreement is dated 2 July 2007. In terms of the agreement, the date for handing over possession was 31 December 2008, with a grace period of six months. Even in 2011, when the buyer filed a consumer complaint, he was ready and willing to accept possession. It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession. By 2016, nearly seven years had elapsed from the date of the agreement. Even according to the developer, the completion certificate was received on 29 March 2016. This was nearly seven years after the extended date for the handing over of possession prescribed by the agreement. A buyer can be expected to wait for possession for a reasonable period.
A period of seven years is beyond what is reasonable. Hence, it would have been manifestly unfair to non-suit the buyer merely on the basis of the first prayer in the reliefs sought before the SCDRC. There was in any event a prayer for refund. In the circumstances, we are of the view that the orders passed by the SCDRC and by the NCDRC for refund of moneys were justified. Having regard to all the facts and circumstances of the case, we modify the order of the NCDRC by directing that the appellant shall pay interest at the rate of 9% per annum to the respondent instead and in place of 12% as directed by the NCDRC. Save and except for the above modification, we affirm the directions of the NCDRC."
So it is clear that such type of agreement which is one sided cannot be binding on the consumer. When the consumer is in default you will charge exorbitant rate of interest and when you, the builder, is in default you provide a meagre amount of damage to the consumer. Therefore such an agreement cannot be considered as a true agreement or contract of the parties.
Now we come to the present case. It is clear that the opposite party failed to provide the possession of the flat within stipulated time. The sale deed executed on 06.03.2014 but possession has not been delivered till date. The reasonable time for giving the possession is three years as per Hon'ble Supreme Court's judgment. In this case a fraud has also been played that sale deed has been executed but possession has not been delivered. We presume the date of delivery of possession as 06.03.2017 and for the sake of convenience we take it as 01.04.2017 as the cut of date for delivery of possession.
Now we have to see the compensation, loss of rent due to non-delivery of possession and rate of interest on the deposited amount by way of judgment delivered by Hon'ble Supreme Court and Hon'ble NCDRC.
Ghaziabad Development Authority v. Balbir Singh In the Supreme Court of India Name of the Case Ghaziabad Development Authority v.
Balbir Singh Citation (2004) 4 SCC 65 Year of the Case 2004 Petitioner Ghaziabad Development Authority Respondent Balbir Singh Bench/Judges Justice H. K. Sema Justice S.N. Variava Acts Involved Consumer Protection Act, 1986 Important Sections Section 14 of the Consumer Protection Act, 1986 Section 22 of the Consumer Protection Act, 1986 The case of Ghaziabad Development Authority v Balbir Singh is a landmark decision that laid down certain judicial standards regarding the grounds on which compensation may be awarded, particularly, in matters of allotment of flats/plots by land development authorities. Compensation under consumer protection laws is required to recompense for loss or injury suffered by consumers, and therefore, the quantum of compensation to be awarded would necessarily have to be determined based on the facts and circumstances of each case. This decision set an established precedent on the issue of compensation to be awarded in consumer disputes, and its principles have been relied upon in numerous subsequent cases.
Introduction The consumer protection laws establish a redressal mechanism whereby consumers can claim monetary reliefs for defective goods, deficiency in service, and unfair trade practices. Sections 14 and 22 of the Consumer Protection Act, 1986 empower the District, State, and National Consumer Disputes Redressal Commission to "to pay such amount as may be awarded by it as compensation to the consumer for any loss or injury suffered by the consumer due to the negligence of the opposite party". Such monetary reliefs i.e., compensation awarded would have to be based on the facts and circumstances of each case, since the loss and injury suffered would vary. Given the absence of a straight-jacket formula for the determination of the amount of compensation to be awarded in each case, it follows that there can be no uniformity in the award of compensation.
It is for the Consumer Forum to grant compensation to the extent it finds it reasonable, fair, and proper in the facts and circumstances of a given case according to the established judicial standards where the claimant can establish his charge.[1] These 'established judicial standards' have been laid down in a plethora of cases. The case of Ghaziabad Development Authority v Balbir Singh[2] is a landmark decision that discussed the grounds on which compensation may be awarded, particularly, in matters of allotment of flats/plots by land development authorities. It set an established precedent on the issue of compensation to be awarded in consumer disputes, and its principles have been relied upon in numerous subsequent cases.
Background and Facts of the Case The present case of Ghaziabad Development Authority v Balbir Singh arose out of an appeal directed against the judgment and award passed by the National Consumer Disputes Redressal Commission (NCDRC) awarding an interest @ 18% per annum. The Commission was considering a bunch of matters, the lead being the case of Haryana Urban Development Authority vs. Darsh Kumar, where it held that in cases of deficiency of service by development authorities, the rate of interest awarded must be 18% per annum. Following this, the Commission disposed of subsequent matters by its preceding award. Numerous appeals were filed before the Supreme Court against the decision of the Commission in various cases, primarily against its award of 18% interest.
Since the Supreme Court was considering a wide number of matters relating to allotment of land by development authorities, the facts of each case vary. In some cases, the scheme had gotten canceled after the payment of monies and allotment of flats/plots. Delivery of possession of the flats was therefore refused to the allottees. In some cases, either possession was offered at an increased rate at a much later date possession or was offered but not taken by the party. Possession was not delivered in some cases despite payment of monies and no refusal to deliver possession. In some cases, the construction was of sub-standard quality or it was incomplete, or the authority demanded extra amounts from the party which was paid only by some. In some cases, allotments were made and possession offered of flats/land which was encumbered or occupied by some other party.
The appeal in the Supreme Court was filed due to the Commission granting interest at the rate of 18% per annum irrespective of the type of case or amount of delay and without even going into the facts of the case. Complainants had asked for the refund of amounts wrongly collected and in other cases, asked for a refund of the amounts paid.
Issues Involved Whether the grant of interest at the rate of 18% per annum by the National Consumer Disputes Redressal Commission in all cases is justifiable?
Related Provisions Section 14 of the Consumer Protection Act, 1986 Section 22 of the Consumer Protection Act, 1986 Related Cases The Supreme Court relied upon the case of Lucknow Development Authority v. M. K. Gupta[3] which firstly widened the scope of "service" defined under Section 2(1)(o) of the Consumer Protection Act, 1986 to include the housing construction or building activities carried on by private or statutory bodies.
The Court relied upon the English case Geddis v. Proprietors of Bann Reservoir[4] which gave a wide connotation to the word compensation, holding that "Compensation has not been defined in the Act. According to the dictionary, it means, 'compensating or being compensated; thing given as recompense;'. In a legal sense, it may constitute actual loss or expected loss and may extend to physical mental or even emotional suffering, insult or injury or loss."
Judgment The Supreme Court, at the outset, reiterated the position taken in the case of Lucknow Development Authority v. M.K. Gupta, and held that "the Consumer Protection Act has a wide reach and the Commission has jurisdiction even in cases of service rendered by statutory and public authorities". It further held that the power of the NCDRC extends to awarding compensation to consumers for misfeasance in the public office i.e. an act which is oppressive or capricious or arbitrary or negligent provided loss or injury is suffered by a citizen. Therefore, it upheld the appeals filed before it to the extent that it confirmed the jurisdiction of the NCDRC to award compensation in cases of service rendered by statutory & public authorities (the land development authorities in the present case).
As to the issue of whether the grant of interest at the rate of 18% per annum by the NCDRC in all cases is justifiable, the Supreme Court held in the negative. It stated that "the power to and duty to award compensation does not mean that irrespective of facts of the case compensation can be awarded in all matters at a uniform rate of 18% per annum." It held it to be unsustainable. The Court further stated that the "Award of compensation must be under different separate heads and must vary from case to case depending on the facts of each case." The purpose of awarding compensation is to recompense for a loss or injury suffered and such compensation would therefore be proportional to the amount of loss and injury.
While considering the compensation to be awarded to the consumers in cases of deficiency of service by Development Authorities, the Court laid down a range of principles for the determination of the amount of compensation, summarised below:
To award compensation, the Forum or the Commission must determine that service has been deficient and/or misfeasance in public office which has resulted in loss or injury. While no hard and fast rule can be laid down, the Court gave a few instances where the award of compensation would be justifiable, including where possession is not handed over within the intimated period even though allotment is made and the price is paid. In such cases, the loss could be determined based on loss of rent which could have been earned if possession was given. Compensation could also be the scheme has been canceled without any justifiable cause, after the allotment.
Compensation cannot be uniform and to illustrate this, the Court lays down the principle to be followed for the determination of compensation in two cases- - (a) where the delivery of possession is being directed, and (b) where only the monies are directed to be returned or refunded by the Court. In case (a), the compensation for harassment will necessarily have to be less since in a way the aggrieved party is being compensated by an increase in the value of the property he is getting. In case (b) however, the party is suffering a greater loss since he has been deprived of the flat/plot, and his expectation of delivery of possession. He would also be denied the benefit of an increase in the value of land and the compensation thereof. Therefore, the compensation to be awarded in such cases would have to be higher than in case (a).
The Court held that "such compensation has to be worked out after looking into the facts of each case and after determining what is the amount of harassment/loss which has been caused to the consumer."
Compensation would include compensation for physical, mental, or even emotional suffering, insult, or injury or loss.
Awarding of Compensation in the Event of Deficiency in Service Rendered The consumer protection laws have a wide reach and the consumers are entitled to receive compensation for deficiency in services rendered by statutory and public authorities. The Consumer Commissions have been vested with the jurisdiction to award the value of goods or services and compensation. On being satisfied that a complainant is entitled to compensation for loss or injury or harassment or mental agony or oppression, it must direct the authority to pay compensation. A wide discretion has been given to determine the quantum of compensation for any loss or damage suffered by a consumer, to redress any injustice. However, it is a well-established principle that the computation of compensation has to be fair, reasonable, and must reconcile with the loss or injury suffered. The Consumer Forum is cast with the duty to take into account all relevant factors for arriving at the compensation to be paid.
This landmark decision has set a precedent on the matter of compensation to be awarded in matters relating to allotment of land by development authorities and has been relied upon in many subsequent cases of the Supreme Court. In the case of H. P. Housing Board v Varinder Kumar Garg[5] and Haryana Urban Development Authority vs Darsh Kumar[6], the Supreme Court directed the Commission to follow the principles laid down in the case of Ghaziabad Development Authority vs. Balbir Singh in future cases.
Conclusion This landmark decision laid down rudimentary principles and set judicial standards concerning the awarding of compensation and the determination of the quantum of compensation to be awarded. It struck down the mechanical application of a fixed rate of interest at 18% per annum by the National Commission in numerous cases, asserting that there can be no hard and fast rule.
The principles enunciated go a long way in ensuring that consumers are compensated appropriately and proportionally for the loss and injury suffered. This decision has further strengthened the consumer protection laws by bringing clarity to how the consumer is required to award compensation.
References [1] Chief Administrator, H.U.D.A. &Anr. v. Shakuntla Devi, (2017) 2 SCC 301 [2] (2004) 5 SCC 65 [3] (1994) 1 SCC 243 [4] (1878) 3 AC 430 [5] (2005) 9 SCC 430 [6] (2005) 9 SCC 449 In a latest case, on Supreme Court in Petition(s) for Special Leave to Appeal (C) No(s). 24059/2022 (Arising out of impugned final judgment and order dated 19-09-2022 in RP No. 1187/2022 passed by the National Consumers Disputes Redressal Commission, New Delhi) MEERUT DEVELOPMENT AUTHORITY Petitioner(s) VERSUS SURESH CHAND GARG Respondent(s) (FOR ADMISSION and IA No.202401/2022-EXEMPTION FROM FILING O.T. ) Date: 05-01-2023 This petition was called on for hearing today.
Held "We have heard learned counsel for the petitioner and find that the order passed by the Consumer Commission was reasonable and there was no reason of filing appeal/revision against the substantive order passed on the consumer complaint by the District Consumer Commission dated 06.09.2019. Consequently, the present petition is disposed of with a direction, to sum up the litigation which is pending for a long time, that let the order of the District Consumer Commission dated 06.09.2019 shall be complied with and the respondent be refunded the entire deposit with simple interest at the rate of 12% per annum within a further period of 60 days from today, failing which it shall carry interest at the rate of 15% per annum until actual payment."
In the case of PRIYANKA MITTAL & ANR. V. PARSVNATH DEVELOPERS LTD. & ANR. (NCDRC).These appeals arise out of single order of State Commission, hence, decided by common order. These appeals have been filed against the order dated 25.2.2015 in Complaint Nos. 18 of 2013- Nalin Bhargava & Anr. Vs. Parsvnath Developers Ltd. & Anr.; 34 of 2013- Jasleen Viswanathan & Anr. Vs. Parsvnath Developers Ltd. & Anr.; 58 of 2011- Janmejai Mani Tiwari Vs. Parsvnath Developers Ltd. & Anr.; 68 of 2013- Indu Singh Vs. Parsvnath Developers Ltd. & Anr.; 69 of 2013- Poonam Sagar Vs. Parsvnath Developers Ltd. & Anr.; 86 of 2010- Priyanka Mittal & Anr. Vs. Parsvnath Developers Ltd. & Anr.; 101 of 2011- Mohd. Aslam Khan & Anr. Vs. Parsvnath Developers Ltd. & Anr.; 130 of 2012- Dr. Sunil Kr. Singh & Anr. Vs. Parsvnath Developers Ltd. & Anr.; 49 of 2012- Neera Mittal & Anr. Vs. Parsvnath Developers Ltd. & Anr.; 74 of 2011- Deepak Bhalla Vs. Parsvnath Developers Ltd. & Anr.; 87 of 2010- Syed Gufran Ali Alvi & Anr. Vs. Parsvnath Developers Ltd. & Anr.; 96 of 2011- Uppasana Malik Vs. Parsvnath Developers Ltd. & Anr.; 175 of 20130- Umesh Chandra Dixit & Anr. Vs. Parsvnath Developers Ltd. & Anr.; 97 of 2011- Pravin Kumar Goel & Anr. Vs. Parsvnath Developers Ltd. & Anr. which complaints were partly allowed.
The Hon'ble NCDRC held that:
"Brief facts of the cases are that opposite parties/respondents are engaged in the activity of housing construction and accordingly they have launched a project named as Parsvnath Planet situated in Gomti Nagar, Lucknow. The project was demonstrated to be very lucrative and made attractive to the vendees, in order to procure/collect money from the needy persons demonstrating themselves to be excellence in the field of construction activity as compared to other builders and assured the buyers/complainants that it has been duly approved by the Lucknow Development Authority and necessary permission has also been obtained from them. The emphasis was made by the opposite parties that the possession of the Unit shall be given within a scheduled period of 36+6=42 months stipulated in agreements executed in between the parties for the project launched in the year 2006. The complainants/appellants attracted by the promise and assurance of the opposite parties, somehow managed and arranged the money from their personal sources as well as on loan at attractive rate of interest and the hard earned money was paid by them to the opposite parties in a hope that the possession of the units shall be provided to them in the year 2009 and they can leave peacefully in their own houses, since the complainants are living in rented houses.
The complainants visited the construction site of the opposite parties after depositing the entire amount, where it was revealed that the construction activities were on halt and the persons available on the site told the complainants that the apartments are likely to be completed till 2015. Even the partial construction done by the opposite parties was defective and did not match the specifications provided in the agreement. The complainants were shocked on hearing it and observing the site. The complainants immediately contacted the Area Manager, who told the complainants that there is some delay in the construction of the apartment and the apartments shall be ready till June, 2010. The complainants have to repay the amount taken on loan alongwith interest without getting the possession of the allotted units causing irreparable loss and injury to them. The complainants have come to know that the opposite parties have invested the funds earmarked for this project into their other projects in other city due to which they have not been able to complete the project in time. Besides this, it has also come to the light that although the opposite parties had collected huge funds from the buyers but in spite of that the opposite parties have miserably failed to pay the dues of Lucknow Development Authority which forced the Lucknow Development Authority to issue coercive measures against the opposite parties for the recovery of their dues. Alleging deficiency on the part of opposite parties/ respondents, complainants filed separate complaints before State Commission. Aggrieved by the order of Hon'ble State Commission, these appeals preferred before Hon'ble National Consumer Disputes Redressal Commission.
Hon'ble NCDRC discussed various case laws and after hearing the parties held, "Learned Counsel for appellants submitted that as complainants have been deprived of possession for a long period beyond agreed period, it amounts to restrictive trade practice under Section 2 (nnn) of Consumer Protection Act and complainants are entitled to get compensation. Section 2 (nnn) runs as under:- means a trade practice which tends to bring about restrictive trade practice manipulation of price or its conditions of delivery or to affect flow of supplies in the market relating to goods or services in such a manner as to impose on the consumers unjustified costs or restrictions and shall include- Delay beyond the period agreed to by a trader in supply of such goods or in providing the services which has led or is likely to lead to rise in the price; Any trade practice which requires a consumer to buy, hire or avail of any goods, or, as the case may be, services as condition precedent to buying, hiring or availing of other goods or services; Perusal of aforesaid provision reveals that when opposite party delays in delivery of goods which leads to rise in the price of goods meaning thereby, more price is charged from complainant, it amounts to restrictive trade practice. In the case in hand, opposite party on account of delayed delivery of possession is not charging higher rate than the agreed rate for delivery of possession of flat, so, it does not fall within the purview of restrictive trade practice under Section 2(nnn) of Consumer Protection Act."
"Admittedly, agreements were executed in 2006 and as per agreements, possession of flats was to be delivered within 42 months, meaning thereby, possession was to be given in the year 2009-2010 and possession has not been handed over so far though year 2016 has started. No doubt, complainants are entitled to get penalty amount for delayed delivery of possession as per clause 10(c) of the agreement but opposite party cannot be permitted to avail benefit of aforesaid clause for indefinite period. This penalty clause should be allowed for the benefit of parties for a limited period and in the cases in hand, I deem it appropriate to extend applicability of aforesaid clause for a period of one year beyond 42 months and after that, complainants are certainly entitled to compensation. Opposite party cannot be allowed to avail huge funds of complainants by paying merely Rs. 5/- per sq. ft. for example, complainants who have purchased flat measuring 164.901 sq. mtr., they have made payment of about Rs. 31.00 to 32 lakhs and in the garb of clause 10 (c), opposite party is paying penalty @ approximately Rs. 9,000/- per month against enjoying funds more than Rs. 30.00 lakhs. As complainants have been deprived to shift to their flats for a long period which would not only have given them satisfaction of living in their own house but also have raised their social status and opposite party has enjoyed funds of complainants for a long period, I deem it appropriate to allow compensation @ Rs. 15,000/- p.m. to the complainants who have applied for flats upto 175 sq. mtr and Rs. 20,000/- per month to complainants who have applied for flats above 175 sq. after 54 months of execution of agreement till delivery of possession."
Against this judgment, parties went to Hon'ble Supreme Court. The judgment of Hon'ble Supreme Court is:-
In Nalin Bhargava vs. Parsvnath Developers Ltd. CA 6662/2018 @ SLP(C) 7596/2016 etc and other related civil appeals on 13 July, 2018, Hon'ble Supreme Court held:-
"Leave granted in all the special leave petitions.CA 6662/2018 @ SLP(C) 7596/2016 etc. It is submitted by Mr. M.L. Lahoty, learned counsel appearing for the appellants in all the appeals that the possession has been handed over and the deficiencies have been removed and, therefore, he has no grievance. However, Mr. Lahoty would insist that there should be imposition of costs as compensation.
Mr. Sachin Datta, learned senior counsel appearing for the developer has raised objections with regard to imposition of costs.
Having heard learned counsel for the parties, we are of the considered opinion that the cause of justice would be best subserved if each of the appellants in the present appeals are given Rs.1,50,000/- (Rupees one lakh fifty thousand only) per flat, towards costs. When we say "cost", we mean costs alone and nothing else."
We have seen that the opposite parties have stated that this Hon'ble commission has disposed of so many cases pertaining to this project therefore they also want that this case we also disposed of in the same manner and they stated, "It is stated that since the captioned complaint also pertains to the same project and apart from the basic facts of the case which differs from allottees, the broad stand of the opposite parties remains the same as was averred in the complaints already disposed by the common order/judgment, the captioned complaint be also disposed off by this Hon'ble Commission."
On the one side they have requested this Hon'ble commission disposed of this petition in the light of the previous judgments and on the other way they vehemently denied all the averments of the complainant and stated that complainant should be dismissed. What the opposite parties want? They are serving two masters. From the date of judgment passed in similar matters by this commission, many case laws have come into existence and now the scenario has changed and that judgment cannot be applied here.
These builders are just earning money from the consumers to whom they issued allotment letters and got a huge amount. They keep this amount for a long time and earn interest on it. Property dealing is that part of business where they never pay a penny to the consumers on their amounts deposited for a long-term or if they pay, they pay a meagre interest of about 5% or so but they charge 18 to 24% or more if the consumers default in depositing any instalment. It reminds us the story of "The Merchant of Venice" The Merchant of Venice is the story of a Jewish money lender Shylock who demands that an antisemitic Christian offer "a pound of flesh" as collateral against a loan. These acts of builders also remind us the age of Sahukari during ancient India and also during British Raj. Whether these builders have power to frame their own law? They put their terms and conditions in such a way that the sufferer will always be the consumer. The Consumer Protection Act 1986 has been enacted for the benefits of consumers, so the courts dealing with Consumer Protection Act 1986 should come forward for their rescue. The courts are not governed by the builders but they are governed by the law, Custom and Usages.
After discussion about the facts and circumstances of the case we count the conclusion that the complainants are entitled for the following reliefs :
1- the complainants are entitled to get the deposited amount of Rs.24 lakhs and also the amount spent on the stamp that is Rs.168,000/- with interest at a rate of 12% from 01.04.2017, if paid within 30 days from the date of judgment of this complaint case otherwise the rate of interest shall be 15% per annum from 01.04.2017 date of actual payment.
2- The complainants are entitled to get Rs.10 lakhs as compensation for the expenditure in availing loan facility and compensation for the loss of saving/income with interest at a rate of 12% from 01.04.2017 if paid within 30 days from the date of judgment of this complaint case otherwise the rate of interest shall be 15% from 01.04.2017 till the date of actual payment.
3- The complainants are entitled to get Rs.5 lakhs as compensation. 4- The complainants are entitled to get Rs.50,000.00 towards cost of the case. 5- Regarding relief (iv) the complainants are entitled to get Rs.30 lakhs towards cheating, fraud, depression, mental harassment, deficiency in service and unfair trade practice with interest at a rate of 12% per annum if paid within 30 days from the date of judgment of this complaint case otherwise the rate of interest shall be 15% per annum from 01.04.2017 till the date of actual payment. ORDER
The complaint case is decided in the light of above discussions and case laws as follows:-
1- The opposite party is directed to pay to the complainant Rs.24 lakhs and also the amount spent on the stamp that is Rs.168,000/- with interest at a rate of 12% from 01.04.2017, if paid within 30 days from the date of judgment of this complaint case otherwise the rate of interest shall be 15% per annum from 01.04.2017 date of actual payment.
2- The opposite party is directed to pay to the complainant Rs.10 lakhs as compensation for the expenditure in availing loan facility and compensation for the loss of saving/income with interest at a rate of 12% from 01.04.2017 if paid within 30 days from the date of judgment of this complaint case otherwise the rate of interest shall be 15% from 01.04.2017 till the date of actual payment.
3- The opposite party is directed to pay to the complainant Rs.5 lakhs as damages if paid within 30 days from the date of judgment of this complaint case otherwise the rate of interest shall be 15% from 01.04.2017 till the date of actual payment.
4- The opposite party is directed to pay to the complainant Rs.50,000.00 towards cost of the case if paid within 30 days from the date of judgment of this complaint case otherwise the rate of interest shall be 15% per annum from 1.4.2017 till the date of actual payment.
5- Regarding relief (iv) The opposite party is directed to pay to the complainant Rs.30 lakhs towards cheating, fraud, depression, mental harassment, deficiency in service and unfair trade practice with interest at a rate of 12% per annum if paid within 30 days from the date of judgment of this complaint case otherwise the rate of interest shall be 15% per annum from 01.04.2017 till the date of actual payment.
If the order has not been complied with, within 30 days from the date of judgment of this complaint case the complainant will be free to present execution application at the cost of the opposite parties.
The stenographer is requested to upload this order on the Website of this Commission today itself.
Certified copy of this judgment be provided to the parties as per rules.
(Vikas Saxena) (Rajendra Singh) Member Presiding Member Judgment dated/typed signed by us and pronounced in the open court. Consign to the Record-room. (Vikas Saxena) (Rajendra Singh) Member Presiding Member Dated 1.12.2023 JafRi, PA I C-2 [HON'BLE MR. Rajendra Singh] PRESIDING MEMBER [HON'BLE MR. Vikas Saxena] JUDICIAL MEMBER