National Consumer Disputes Redressal
Nikhil Kumar Garg vs Castle Vista Pvt. Ltd. & Anr. on 31 January, 2023
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 474 OF 2020 1. NIKHIL KUMAR GARG SC 279, Shastri Nagar, Ghaziabad - 201 002 Uttar Pradesh ...........Complainant(s) Versus 1. CASTLE VISTA PVT. LTD. & ANR. Through its Directors, Registered Office at No. 41, Vittal Mallya Road, Bangalore - 650 001 2. GOKULAM SHELTERS PVT. LTD. Through its Directors, Registered Office at Gokulam Complex, 8th Mile, Doddalakkasandra Post Vasanthapura Village, Kanakapura, Main Road Bangalore, Bangalore - 560 062 ...........Opp.Party(s) BEFORE: HON'BLE MR. BINOY KUMAR,PRESIDING MEMBER HON'BLE MR. JUSTICE SUDIP AHLUWALIA,MEMBER
For the Complainant : Mr. Aditya Parolia, Advocate Ms. Sumbul Ismail, Advocate Ms. Ishita Singh, Advocate. For the Opp.Party : Mr. Shekhar G. Devasa, Advocate Mr. Thashmitha Muthanna, Advocate Mr. Shashi Bhushan Nagar, Advocate. Dated : 31 Jan 2023 ORDER JUSTICE SUDIP AHLUWALIA, MEMBER
This Complaint has been filed under Section 21 r/w section 12(1)(a) of the Consumer Protection Act 1986, seeking possession of the unit complete in all respects along with interest @12% p.a. and other ancillary reliefs.
2. The brief facts leading upto the present Complaint are that the Complainant had booked an Apartment in a project being developed by the Opposite Parties namely "Serenity" situated at Kanakpura Main Road, Bangalore (hereinafter referred as 'Project'). After taking the booking amount, the Opposite Parties executed an Agreement to Sale dated 02.05.2013 wherein Complainant was allotted unit No. J- 803 on 8th Floor, in Block- J, measuring a super built up area of 118.96 sq. mt. approx. Subsequently, a Construction Agreement dated 02.05.2013 was also executed between Complainant and Opposite Party No.2. As per Agreement to sale, the unit was worth Rs.38,91,200/- and as per the Construction Agreement, the construction cost was Rs.26,04,000/-, hence, the total consideration of the unit was Rs.64,95,200/- excluding other charges. As per Annexure B1 of the Construction Agreement, the Opposite Party(ies) promised to deliver the possession of the Apartment by 31.12.2015, however, the unit is nowhere near completion and the possession has not been offered till the date of filing of the Complaint even after a delay of more than 4 years. The Complainant has averred that a total sum of Rs.75,27,183/- has been paid towards cost of the unit. It is further averred that the Complainant took a Home Loan of Rs.60,00,000/- from HDFC and subsequently, a Tripartite Agreement dated 10.05.2013 was executed between HDFC, Complainant and Opposite Party No.1. The Complainant has submitted that the Complainant repaid the Loan taken from HDFC. The Complainant further submitted that there is significant delay in handing over possession of the unit by the Opposite Party without any assurance of getting the physical possession anytime soon. It is also submitted that the Complainant believes that the Opposite Party(ies) has fraudulently diverted the funds collected from the Complainant and other buyers to its other projects. The Complainant has averred that the cause of action to file the present Complaint is continuing in his favour since the possession has not been offered till date. Hence, being aggrieved by the delay made by the Opposite Party(ies) in handing over possession of the unit, the Complainant filed the Complaint seeking possession of the unit complete in all respects along with interest @12% p.a. from the date of delivery promised in the Agreement till the date of actual possession with other ancillary reliefs.
3. Subsequently, by way of IA No. 2320 of 2021, the Complainant amended his prayer by seeking refund of the amounts paid by him to the Opposite Party(ies) towards purchase of the Apartment in place of possession. The justification for seeking such relief at that stage was that during pendency of the complaint, he received an e-mail from the Opposite Party(ies) dated 20.12.2020, which sought his "consent for extension of the date for delivery of possession till 10.12.2021, which was not acceptable to him, but having thus realised that even at that stage, it would take another year to get possession of the Apartment when his dream of having moved into his own residence with family had been inordinately delayed by 06 years, if at all possession were to be actually delivered to him subsequently, he chose to give up his original prayer and seek refund.
4. The Opposite Parties have filed their written version to resist the present Complaint. The Opposite Party has at the outset denied the allegations and has raised the following objections:
The Complainant is not a 'consumer' as he has invested his money for profit making which is commercial purpose. The Complainant had booked and was allotted the present unit in the project 'Mantri Serenity', now called as Castle Vista under pre-EMI Scheme. The Complainant has also booked a flat in another project called 'Mantri Blossom' bearing unit no. D1003 under Buyback/Assured Return Scheme which is purely investment purpose to get return on his investment and accordingly the Complainant has also filed a Consumer Complaint No.344/2020 before this Hon'ble Court which is pending against the Opposite Party and had also approached Hon'ble NCLT, Bangalore in this regard. The Opposite Parties also came to know that the Complainant is residing in Ghaziabad in UP and has booked flats in several places.
The Complaint does not come under pecuniary jurisdiction of this Hon'ble Commission. The total cost of the unit is Rs.64,95,200/- which is lower than Rs.1 Crore.
The Complainant is guilty of suppression of material facts, as he has failed to disclose that he had also entered into a pre-EMI scheme with Opposite Party and the Opposite Party has paid pre-EMI for 54 months on behalf of the Complainant which itself is amounts to Rs.28,63,808/- and has also given credit note for 5 months Pre-EMI amounting to Rs.2,67,720/- and this amount of Rs.2,67,720/- would be adjusted in the balance amount to be paid by the Complainant at the time of registration of Unit. The Opposite Party has reimbursed the Pre-EMIs to the Complainant as committed under the scheme.
The Complainant has further failed to disclose the fact that the project in question is registered with RERA Act and as per that, the date of handing over possession of the flat is January, 2020 which was communicated to the Complainant. Thereafter the Opposite Party has applied for extension before the RERA, Karnataka and the same has been extended till 29.01.2021.
The present Complaint does not fall under the purview of Section 21(a)(i) of the Consumer Protect Act,1986. The said Complaint is pre-mature, no cause of action arose to file the present Complaint. And the present Complaint has to be tried before the competent Civil Court having jurisdiction. The Complainant should have invoked the 'arbitration clause' as per clause 21 of the Agreement of Construction.
The Opposite Party No.2, Gokulam Shelters Pvt. Ltd. is neither a necessary party to this Complaint nor is concerned about the development of the project in question except that it was owner of the property before the development of the project.
The Opposite Party has obtained all the necessary approvals, NOCs and sanctioned plan from various Competent Authorities. The Bangalore Development Authority has issued partial Occupancy Certificate dated 10.02.2016 to the Opposite Party in respect of Tower-2 blocks 'A to D'.
The interest and compensation claimed by the Complainant are not in conformity with the agreed terms. The flat in question is ready for possession as indicated in the photographs and the flat will be delivered. The Opposite Party is abiding by the terms of the Agreement for Construction and is relying on the same to compensate the buyers. As per clause 14.5 of the Agreement of Construction, a sum of Rs.3/- per sq. ft. per month of the total saleable area is payable to the Complainant in case of delay in delivery of possession. Hence, claiming compensation beyond the agreed terms is against the principles of law.
The delay in the present case is attributable to a number of factors. Hence, it is squarely covered by the situation of clause 6.4 of the agreed contract between the parties which was out of control of the Opposite Parties. The delay in completion of the project is also due to economic factors, heavy rainfall, demonetisation and non-payment of instalments by many purchasers. Also, the Karnataka State Pollution Control Board (KSPCB) issued false notices including notice for stoppage of construction and directed the BESCOM to cut off power supply to the project which was stayed by the Hon'ble High Court of Karnataka in W.P. No. 50207/2019 and the said proceedings are pending consideration.
The Opposite Parities have been on a regular basis writing emails to the Complainant/residents to prevent any chaos.
The complainant is not entitled to compensation only on grounds for delay. In the present case, delay has been accounted for and such delay is not a major delay and is beyond the control of the Opposite Party.
5. Hence, the Opposite Party has prayed for dismissal of the present complaint with costs.
6. Rejoinder has been filed behalf of the Complainant. The Complainant has at the outset denied the averments and allegations made in the Reply filed by the Opposite Party except those that are expressly admitted and has averred that the Opposite Party is trying to mislead this Commission.
7. Affidavit in Evidence has been filed by Mr. Nikhil Kumar Garg on behalf of the complainant. Affidavit in Evidence has been filed by Mr. Girish Gupta H.S. on behalf of the Opposite Parties.
8. Heard the Ld. Counsel for the parties. Perused the material available on record.
9. It is a matter of record that originally the stipulated date of delivery of possession to the Complainant was 31.12.2015.However, the possession was not offered for almost 05 years after which the Complainant approached this Commission.But even during pendency of the proceedings, the Opposite Parties on their own, approached him vide e-mail dated 20.12.2020 seeking his consent for extension of time for such delivery for another year till 10.12.2021 which was not acceptable to the Complainant on account of which he chose to seek refund of the payments made by him towards purchase of the Apartment.But, from the Affidavit in Evidence filed by Mr. Girish Gupta, HS, the Authorised Representative of the Opposite Parties, which is seen to have been attested by the Notary on 19.2.2022, it transpires that the project was still not complete even on that date, which ex facie would impeach the renewed commitment to deliver possession by 10.12.2021, which offer, in any case, was not acceptable to the Complainant.
10. Regarding the contention that the Complainant is not an investor since he had entered into a Buy-back Agreement with the Opposite Parties, it may be mentioned that the said Agreement was entered into on 12.7.2016 in which an option was given to the Complainant to return the property in question to the Developer in case he intended to sell the same after a period of 30 months i.e. after the month of January, 2019, in which event he would have been entitled to an amount of Rs. 59,28,230/-, but the sale price would goto the Developer.It is also noteworthy that such option to sell was to have been exercised by the Complainant within 30 months' time. He never exercised such option which itself would indicate that he did not have any intention to sell the said flat, which in any case, was different from the flat in the present case, being in a different project named 'Mantri Blossom'. At any rate, no such Buy-back Agreement at all had been executed in respect of the Flat which is the subject matter of the present complaint.
11. Further, the fact that the Complainant had booked two residential flats would not ipso facto mean that his intention was necessarily to make any strategic profit making investment with a view to sell any unit, from the very time he opted for purchase.There is nothing on record, much less in documents filed on behalf of the Opposite Parties to show that the Complainant is engaged in the business of buying and selling properties with a view to earn profits therefrom. The fact that at the relevant time the Complainant was based in Singapore, or is subsequently now residing in Ghaziabad cannot ipso facto give rise to any presumption that his intention was neve to personally shift into the Apartment in question at Bangalore, at any subsequent stage.
12. As such, the contention of the Opposite Party that the Complainant is not a "Consumer" within the meaning of Section 2 (1) (d) of the Consumer Protection Act, 1986, in as much as he had booked the property in question for commercial purposes i.e. only for resale, is untenable especially in view of an earlier decision of this Commission in "Kavita Ahuja Vs. Shipra Estates" III (2016) CPJ 31, in which it was laid down that the onus of establishing that the Complainant was dealing in real estate i.e. in the purchase and sale of plots in his normal course of business to earn profits, shifts upon the Opposite Party, which in the instant case the Opposite Parties have failed to discharge, by any documentary evidence in this regard. Therefore, we are of the considered view that the Complainant is a 'Consumer' as defined under Section 2(1)(d) of the Act.
By now, the date for delivery of possession has already passed by more than 07 years and even now the Project in question appears to be incomplete.
14. In such circumstances, the present case would appear to be squarely covered by the decisions of the Hon'ble Supreme Court in C.A No.3182 of 2019 dated 25.03.2019 "(Kolkata West International City Pvt. Ltd. Versus Devasis Rudra)", and in C.A. No. 12238 of 2018 dated 02.04.2019 "(Pioneer Urban Land & Infra Ltd. versus Govindan Raghavan)", in which it has been observed that a Purchaser/allottee cannot be made to wait for an indefinite time.
15. In the case of "Subodh Pawar Vs. M/s. IREO Grace Realtech Pvt. Ltd. & Ors"; CC No. 1998 of 2016, decided on 24.9.2018 by this Commission, the Complainant's claim was allowed even when Occupancy Certificate had been obtained by the builder who thereafter sought to offer possession which was almost two years after the stipulated date according to the Agreement.
16. The Hon'ble Supreme Court in "Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra", II (2019) CPJ 29 SC, decided on 25.03.2019 had observed as hereunder -
".....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 SCDRC and by the NCDRC for refund of moneys were justified.......".
17. The Opposite Parties have also claimed that the Complainant is not entitled to any delayed compensation at the rate claimed by him, but any compensation on that account, if at all awardable, cannot exceed Rs. 3/-per sq.ft. per month as per Clause 14.5 of the Agreement for Construction. A bare perusal of the aforesaid Agreement goes to show that its terms and conditions are wholly one-sided and unfair, considering that in the event of any default in payment of instalments, the Complainants/allottees were liable to pay interest @ 1.5.% per months, which therefore would be 18% p.a. from the due date of payment of instalment. Such inequitable condition in the Agreement is certainly not an enforceable against the Complainants in view of two decisions of the Apex Court in "Ireo Grace Realtech Pvt. Ltd. Vs. Abhishek Khanna & Ors., Civil Appeal No. 5785 of 2019, decided on 11.1.2021" and "Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, Civil Appeal No. 12238 of 2018" With "Pioneer Urban Land & Infrastructure Ltd. Vs. Geetu Gidwani Verma & Anr., Civil Appeal No. 1677 of 2019, decided on 2.4.2019"; the relevant portion of the both the judgments are re-produced as below-
"Ireo Grace Realtech Pvt. Ltd. Vs. Abhishek Khanna & Ors.
"19.7 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."
"Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan "6.7. A term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder. The contractual terms of the Agreement dated 08.05.2012 are ex-facie one-sided, unfair, and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2 (r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the Builder."
18. The grounds for delay as made out on behalf of the Opposite Parties to make out a case of 'Force Majeure' conditions are also not convincing and the same grounds have been rejected by not only this Commission but even by the Hon'ble Supreme Court of India in innumerable other matters. In any event, nothing on part of the Complainant at any stage contributed to the failure of the Opposite Parties to complete the Project within a reasonable time.
Consequently, the Opposite Parties are directed to refund to the Complainant Rs. 75,27,183/- (Rupees Seventy Five Lakhs Twenty Seven Thousand One Hundred Eighty Three only) alongwith interest @ 9% p.a. from the respective date of each deposit till realisation, within six weeks from the date of passing of this Order.
Any return payments made already by the Opposite Parties to the Complainant shall be set-off against the Complainant's decretal amount alongwith, the same rate of interest i.e. 9% p.a. on each such returned amount, if any, from each respective date.
The Opposite Party is also directed to pay to the Complainant Rs. 50,000/- as litigation costs.
22. In the event of non-compliance of this Order, the amounts to be paid shall attract an interest rate of 12% p.a. for the same period.
Pending applications, if any, also stand disposed off.
...................... BINOY KUMAR PRESIDING MEMBER ......................J SUDIP AHLUWALIA MEMBER