State Consumer Disputes Redressal Commission
Mahendra Gupta vs Jai Prakash Associates Ltd on 14 September, 2022
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/400/2017 ( Date of Filing : 25 Sep 2017 ) 1. Mahendra Gupta Jalaun ...........Complainant(s) Versus 1. Jai Prakash Associates Ltd Noida ............Opp.Party(s) BEFORE: HON'BLE MR. Rajendra Singh PRESIDING MEMBER HON'BLE MR. Vikas Saxena JUDICIAL MEMBER PRESENT: Dated : 14 Sep 2022 Final Order / Judgement Reserved State Consumer Disputes Redressal Commission U.P. Lucknow. Complaint Case No.400 of 2017 Mr. Mahendra Gupta, aged about 61 years, S/o Daya Ram Gupta, R/o 136, Tulsi Nagar, Orai, Jalaun, Uttar Pradesh-285001 ...Complainant. Versus 1- Jaiprakash Associates Limited, Registered Office at Sector-128, NOIDA-201304 through its Managing Director. 2- Jaypee Infratech Limited (as confirming party), Commercial Department, Registered Office at Sector-128, NOIDA-201304 through its Authorized Signatory. 3- Commercial Department, Jai Prakash Associates Limited, Registered Office at Sector-128, NOIDA-201304 through its Authorized Signatory. ...Opposite parties. Present:- 1- Hon'ble Sri Rajendra Singh, Member. 2- Hon'ble Sri Vikas Saxena, Member. Sri Abhishek Singh, Advocate for the complainant. Sri Pratul Pratap Singh, Advocate for Opposite Party no.1. None for the opposite parties no.2 & 3. Date :06 .10.2022 JUDGMENT
Per Sri Rajendra Singh, Member- The brief facts of the case are that, that the complainant, a resident of 136, Tulsi Nagar, Orai, Jalaun was interested to purchase a flat in a project launched by the opposite parties. The opposite parties provisionally allotted one apartment no.KSI 08-104 in "Kasa Isles" at Jaypee Greens Noida bearing allotment letter reference no.JCNKSI080104 dated 21.7.2010. The flat in question has been located as per location plan, having super area of 127.28 sq. mtrs to be constructed with tentative specification as per the specification sheet.
The provisional allotment letter has been issued for a consideration of Rs.50,14,170.00 only. It is also stated in the allotment letter that for the purpose of clause 6.8 of the Standard Terms and Conditions, any increase or decrease in the super area shall be payable or refundable on pro rata basis. From the perusal of allotment letter, it transpires that the opposite parties have never informed or provided the copy of standard terms and condition at any stage. It is further specifically mentioned in the provisional allotment letter in respect of the schedule of the payment as follows:
"The consideration and the other amounts (as defined in the standard terms and conditions) shall be payable on the dates as specifically mentioned in the payment plan enclosed as annexure V. All payments are to be made by local cheques/ demand drafts drawn in favour of Jaypee Infratech Limited and payment at Delhi."
The complainant has been allotted a unique customer ID, which is "JGNKSI0804104" and opposite parties has further requested to the complainant that to quote customer ID and unit reference number in all future communication. It is further stated that subject to the standard terms and condition, the possession of the said apartment is expected to be delivered to the complainant with in a period of 36 (thirty six) months thereof.
The opposite parties stated that "the standard terms and conditions, of provisional allotment include the undertaking given by the applicant. Further subject to the standard terms and condition and undertaking given by the applicant, this provisional allotment letter shall prevail over all over terms and conditions, specification, etc. given in our brochures, advertisement, price list and any other sale documents. This cancels and supersedes all other previous written and oral understandings in respect of the provisional allotment contemplated by this letter.
In respect of the terms and conditions as mentioned in the present provisional allotment letter the complainant has paid the consideration amount as per the payment plan since 3 July, 2010 till 28.1.2015.
In respect of the payment plan, the complainant paid up Rs.39,10,439.00 since the first installment i.e. 3.7.2010 till 28.1.2015 against the consideration amount. The complainant has paid maximum of the construction amount but the opposite parties failed to construct the flat in question and also failed to handover the possession of the flat in 36 months. The complainant made several requests to the opposite parties but in vein. The complainant met with the opposite parties but they have not paid any attention. The opposite parties were bound to provide the possession of the flat in the promised period of 3 years but they failed to do so. It is deficiency in service and also unfair trade practice. After the mail conversation the complainant met with the opposite parties several times but they did not pay any attention. Hence, the complainant has filed this complaint before this Hon'ble State Commission with the following releifs:
Opposite parties be directed to deliver the possession of the flat as allotted provisionally bearing unit reference no.KSI 08-104 in Kasa Isles at Jaypee Greens Noida having its allotment letter reference no.JGNKSI080 104 on 21.7.2010 to the complainant.
Refund the cost of flat as exist today according to report of valuer as valuate with the interest of 9% on the amount which has been held by the opposite parties as paid by the complainant till date.
Opposite parties be directed to pay the compensation for making delay in possession of flat i.e. Rs.5,00,000.00 along with 9% from the date of initial payment till the date of possession.
Opposite parties be directed to pay the cost of suit.
Any other order which this Hon'ble Commission may deem fit just and proper may kindly by passed in favour of the complainant.
The opposite party no.1 has filed itswritten stating that there is no deficiency in service on their part and they were not involved in any unfair trade practice. The purported delay in completion of flat due to force majeure conditions. The instance complaint relates to unit no.KSI080104 in the sub project Kasa Isles, Jaypee Greens, Noida which lies in the project of Jaypee Infratech Ltd. It is known to all that Jaypee Infratech Ltd. under moratorium as provided in solvency and bankruptcy Code vide order dated 9.8.2017 passed by NCLT, Allahabad bench, Allahabad and order dated 11.9.2017 passed by Hon'ble Supreme Court in the matter of Chitra Sharma in the circumstances as per order of NCLT and Hon'ble Supreme Court referred above, all the suits and proceedings instituted against the Jaypee Infratech Ltd. shall in terms of sec-14(1)(a) of the insolvency and bankruptcycode 2016 remain stayed. In the light of above proceedings of the instant complaint cannot be continued against Jaypee Infratech Ltd. and since proceedings of this case cannot continue against one of the respondent, at the same cannot be continued against remainingrespondents. In the circumstances proceedings of the instant complaint deserves to be stayed forthwith.
It is further submitted that the present complaint has been filed by the complainant against Jaiprakash Associates Ltd. and Jaypee Infratech Ltd. It would be pertinent to mention here that Jaiprakash Associates Ltd. i.e. the answering respondent is only the construction agency which has been tasked with the work of booking and constructing the project in question by Jaypee Infratech Ltd. It is the Jaypee Infratech Ltd. to whom the land on which the project is being made ,has been leased out by Yamuna Expressway Authority and to whom all the payments have been made by the complainant herein. As such the possession of the unit in question and even the refund of the amount paid by the complainant has to be made by Jaypee Infratech Ltd. alone and the reply respondent is not liable for the same. It is also pertinent to note that all the allottees including the complainant was made aware about the said fact.
It is submitted that when the complainant approached the answering respondent on his own volition and submitted an application dated 2.7.2010 seeking allotment of subject apartment in the said sub project of the jaypee Infratech Ltd., he undertook that he was aware of the above said facts. Clause 5 and 6 of the undertaking given by the complainant attached with the said application are quoted hereunder as:
"5. I/we are aware that the company has been assigned the task of marketing, construction and booking for sale of the apartment to be constructed in Jaypee Greens for and on behalf of Jaypee Infratech Ltd. and the actual sale/transfer deed (indenture of conveyance) shall be executed by Jaypee Infratech Ltd. in favour of the allottee(s) in accordance with the terms of provisional allotment."
"6. I/we have seen and understood the scheme of development, tentative plans/other documents at Jaypee Greens and I/we also agree to abide by all the terms and conditions of NOIDA or any other statutory or civic authority, to which the JIL and consequently, the applicant, is subject to or any other condition which the company/JIL may prescribe."
It is also stated that the complainant is a resident of Orai, U.P. and the complainant has nowhere stated that he does not has his own house. Also apart from the subject apartment the complainant has also booked another unit bearing no.PCH02P0119 in the project of the respondent. So it is apparent that he has booked the subject apartment in the project for speculating in the Real Estate Market and not for the residential purpose. Therefore, the complainant is not a consumer as defined in Section 2(d) of the Consumer Protection Act, 1986 and the present complaint is liable to be dismissed on this ground alone.
In the case of Anil Dutt vs. Business Park Town Planners Ltd. (BPTP) IV(2013) CPJ 349 (NC), Hon'ble National Commission has been pleased to observe that:
"9. In Chilkuri Adarsh Vs. ESS ESS VEE Constructions, III (2012) CPJ 315, it was held that this has been consistent view of this Commission. It has held that even when a consumer has booked more than one unit of residential premises; it amounts to booking of such premises for investment commercial purpose. This Commission in the case of Jagmohan Chabra and another Vs. DLF Universal Ltd., IV (2007) CPJ 199, in a somewhat similar case held that the complaint was not maintainable under the Consumer Protection Act, 1986. It had, therefore, disposed the complaint with liberty to the complainant to approach Civil Court. The said order has since been upheld by the Honble Supreme Court as Civil Appeal No. 6030-6031 of 2008, filed before the Supreme Court stands dismissed vide the Apex Courts order dated 29.09.2008."
Further, in the case of Indrajit Dutta vs. Samriddhi Developers Pvt. Ltd. and Ors., II(2015) CPJ 342 (NC), Hon'ble National Commission has held that:
"6. Learned counsel for respondent has placed reliance on judgment of this Commission in [III (2012) CPJ 315] Chilkuri Adarsh v. EssEss Vee Constructions in which it was held that when a consumer has booked more than one unit of residential premises, it amounts to booking of such premises for commercial purposes. This Commission in '[IV (2007) CPJ 199] Jagmohan Chabra and Anr. v. DLF Universal Ltd. also observed that when complainant has booked two flats on 2 floors he does not fall within the purview of the consumer. This Commission in 'Consumer Complaint No. 5/2014 and 6/ 2014, Sunil Gupta vs. Today Homes & Infrastructure (Pvt.) Ltd."observed that consumer cannot book two different villas. In the light of the aforesaid judgments it becomes clear that as complainant has purchased two flats, it cannot be said to be for his residential purpose but amounts to be investment for commercial purpose and complainant does not fall within purview of the consumer. Learned State Commission has not committed any error in allowing application and dismissing complaint as not maintainable."
Therefore, the instant complaint is liable to be dismissed outrightly.
There is an arbitration clause no.10.9 in the agreed terms and conditions form dated 2.7.2010 duly executed and signed by the complainant. The complainant had been violating the agreed terms and condition of the allotment by failing to make payment of instalments timely. As per the accounts, an amount of Rs.502.86 is due outstanding and payable. So it is crystal clear that the complainant is the defaulter. On the request of the complainant the respondent under the instruction of Jaypee Infratech Ltd. had already provided the discount of Rs.289/- per sq. ft. to the complainant at the time of booking which shows the bonafide gesture to the complainant.
It is submitted that the complainant has claimed the compensation to the tune of Rs.5 lacs for the delay in possession of the flat alongwith the interest at the rate of 9% p.a. from the date of initial payment till the date of possession. These claims being imaginative and without any basis, do not relate to claims regarding the subject apartment. Yamuna Expressway Project was conceived by the Government of UP in the year 2001 envasing construction of an access controlled six lane (extendable to eight lane) Expressway running about 165 Kms. connecting Noida to Agra. The project being on BOT basis further envisageddevelopment of 25 million sq. mt. of land along with Expressway.
Erstwhile M/s Jaiprakash Industries Ltd. now know as Jaiprakash Associates Ltd. was selected as the lowest bidder and a concession agreement was signed between the U.P. Government and Jaiprakash Industries Ltd. (concessioner) on 7.2.2003. This was later assigned to M/s Jaypee Infratech Ltd. (JIL), a SPV of the respondent herein. An integral part of construction of Expressway, the Concessioner was granted rights to develop 25 million sq. mt. (2500 hectare or 6175 acers) land (land for development (LFD) along the Expressway at five or more locations, out of which one included Jaypee Greens Noida, Distt. G.B. Nagar.
As per the concession agreement with the Government of UP, the Jaypee Infratech Limited was required to develop the Expressway from Noida to Agra and was to fund the cost of the project through either through developing five townships or by sale of land. The respondent in terms of the concession agreement for Yamuna Expressway Project incorporated a special purpose vehicle namely Jaypee Infratech Limited. The entire land for development i.e. at five locations including Noida, (where Jaypee Greens Wish Town Project is being constructed) as leased to Jaypee Infratech Limited by Yamuna Expressway Industrial Development Authority and Jaypee Infratech Limtied launched an integrated Project named Jaypee Greens Wish town in Sector 128, 129, 131, 133 & 134 of Noida. The said project consists of residential, institutional commercial & recreational development.
Jaypee Infratech Limited itself launched various residential sub-projects in the saidJaypee Greens Wish Town Project. One of the said sub-projects, which was launched by the Jaypee Infratech Ltd. was named and styled as "Kasa Isles" (hereinafter referred as " the said subproject") wherein interalia proposed to allot premium apartments to its prospective buyers. In pursuance to the submission of the application form dated 2.7.2010 by the complainant, the Jaypee Infratech Ltd. and answering respondent herein issued a provisional allotment letter dated 21.7.2010 allotting a plot bearing Unit Reference no.KSI0080104 in "Kasa Isles" project of the Jaypee Infratech Limited admeasuring a super area of 1370 sq. ft. (127.28 sq. mtrs) in favour of the complainants herein.
The said provisional allotment letter provided the consideration of the said unit as Rs.50,14,170.00 excluding other charges and a payment plan was also provided therein. The time period for possession was provided as 36 months in the said provisional allotment letter subject to the standard terms and conditions agreed by the complainant alongwith the grace period of 90 days. It is stated that after issuing the provisional allotment letter and after obtaining all the necessary approvals, the respondent as construction agency carried out the development work on the said project. However, for reasons beyond the control of the respondent therein i.e. due to force majeure events such as shortage of labour, scarcity of water, restrictions in excavations, villager agitations as well a legal impediments which continued to exist some time which cause delay in the project and which such facts were duly brought to the notice of complainant herein. It is humbly submitted that due to such events the delivery of project got reschedule.
Clause 7.1 and 7.2 of the standard terms and conditions as agreed by the prospective buyer/customers/complainants provides that:
"7.1 The company/JIL shall make best efforts to deliver possession of the said premises to the applicant within the period more specifically described in the provisional allotment letter with a further grace period of 90 days. If the completion of the said premises is delayed by reasons of non-availability or scarcity of steel and/or cement and/or other building materials and/or water supply and for electric power and/or slow down, strike and/or due to dispute with the construction agency employed by the company, lock-out or civil commotion or nay militant action or by reason of war or enemy action or earthquake or any act of God or if non-delivery of possession is as a result of any law or as a result of any restrictions imposed by a Government Authority or delay in the sanction of building/zoning plans/grant of completion/occupation certificates by any Governmental Authority or for any other reason beyond the control of the Company hereinafter referred to as "force Majeure Events" and each individual event referred to as a (force Majeure Event) the company/JIL shall be entitled to a reasonable extension of time for delivery of possession of the said premises."
It is stated that if the complainant still desires to seek refund of the amount of consideration deposited by him then the same can only be refunded by the Jaypee Infratech Ltd. as per clause 9.1.5 of the standard terms and conditions duly agreed by the complainant.
"9.1.5 (a) The applicant/allottee shall be entitled to cancel the provisional allotment only on default of the company/JIL to deliver up the said premises on payment of full consideration and other dues in accordance with the terms herein and provisional allotment letter. In such an event and upon the request of the applicant/allottee, the JIL shall refund without any interest or compensation whatsoever, the entire amount including Earnest Money as had been received from the applicant.
(b) If the application/allottee for any other reason requests the company to cancel this provisional allotment in his favour, the company may in its sole discretion permit such cancellation provided that the applicant/allottee compensates the company/JIL for any loss caused on account of substituting another applicant/allotte in his/its/her place and stead ("Termination Charge"). The Termination Charge shall not include Earnest Money. In such cases, the Earnest money shall not be refunded.
(c) Notwithstanding anything stated hereinabove, in the event the provisional allotment is terminated by the company under the terms of clauses 5.5 or clause 9.1.5(b) herein the entire amount of earnest money shall be forfeited by JIL. The balance installments paid by the applicant in accordance with the terms hereof shall first be used to satisfy the termination charge, which shall include land in any event not be less than the interest amounts setforth in clause l5.6 herein and the rest of the payments shall be refunded to the applicant without interest."
The respondent started developing the project in Noida. The funding required for the development of the project was partly from sale of apartments and partly by sale of land at other land parcels. The funding by sale of land at other land parcels halted due to farmer's agitation which led to a situation where the respondent could not even enter upon its land parcels and so could not realize the required funds for development for the already launched project. Whenever, the respondent got some opportunity, it sold only a small part of land in Mirzapur land parcel and utilized the funds in the project at Noida. Further, on 29.8.2014, the Government ordered for payment of additional incentive on 64.7% to farmers further restricted the respondent from entering its land parcels, leading to total scarcity of funds for development of the project.
After the increase in the compensation, the villagers stopped the work at the project stating that until they get increased compensation, no work will be allowed at the project. The respondent being aggrieved wrote several letters to the district administration and the State Government but no action was taken by them. This resulted in the land again becoming encumbered as neither it can be used for development nor lit can be transferred till the time the issue of additional compensation is settled. Resultantly, the revenue generation of the respondent from the land stopped which resulted in delay.
In the year 2012 the State Government decided not to handover the Expressway connecting Noida and Greater Noida to the respondent which was to be handed over to it as per the terms of the concession agreement with an entitlement to collect and appropriate the toll. This resulted in substantial loss of revenue to JIL, which revenue it would have generated and used for the development of the land parcels. Apart from the above, it is also relevant to mention herein that the Hon'ble National Green Tribunal (NGT) vide its order dated 11.1.2013 restrained all builders of Noida & Greater Noida, including the respondent, from extracting nay quantity of underground water for the purpose of construction or otherwise and the said restriction is operative even today. Further, the National Green Tribunal vide its interim order dated 14.8.2013 in application no.158 of 2013 titled as "Amit Kumar vs. Union of India &ors." interalia directed that:
"5. We make it clear that all the building constructions made within10 Km radius of the Okhla Bird Sanctuary of within distance of eco-sensitive zone as may be prescribed by the Notification issued by the MoEF shall be subject to the decision of the NBWL and till the time the clearance of NBWL is obtained, the authority concerned shall not issue completion certificates to projects."
Subsequently, the National Green Tribunal vide its final order dated 3.4.2014 disposed of the said application interalia holding as under:
"In such view of the matter, we dispose of the application with the following directions:
The State of Uttar Pradesh shall send its response to the queries raised by MoEF within two weeks from the date of receipt of the copy of the order to the MoEF.
The State of Delhi as well as Haryana who are likely to be affected by fixation of eco-sensitive zone shall also send their proposals to the MoEF within four weeks from today.
After receipt of the said proposal as well as comments by the respective governments within the time stipulated above, we direct the Secretary, MoEF Government of India to call for the concerned officers of all the State Governments concerned and have interaction and decide finally about the fixation of the eco-sensitive zoned in respect of Okhla Bird Sanctuary.
While such decision is taken, the secretary, MoEF in the said meeting shall take into consideration about the demarcation of boundaries in fixing the eco-sensitive zone apart from the issues as to whether it is site specific etc. While making such decision the Secretary, Ministry of Environment and Forest shall also make necessary consultations with the National Board for Wildlife.
After such decision is taken in the meeting convened by the MoEF, the concerned State Governments shall grant their consent within two weeks after the meeting. After such consent obtained, the Ministry of Environment and Forest shall issue necessary notification as per the powers conferred under the Environment Protection Act, 1986, expeditiously.
Till such notification is issued the interim order passed by this Tribunal as modified subsequently shall continue to be in operation.
It is needless to state that any decision taken by the Government in notifying the Eco-sensitive Zone shall be subject to the final decision of the Hon'ble Supreme Court in the matter pending before it."
The respondent herein, thereafter filed an application being MA no.240 of 2014 for review/modification of the judgment and other dated 3.4.2014 in application no.158 of 2013 passed by the National Green Tribunal, the respondents herein filed a civil appeal being 5822-5823 of 2014 before the Hon'ble Supreme Court and the Hon'ble Supreme Court vide its order dated 10.6.2014 declined to interfere with the orders passed by the National Green Tribunal and was pleased to dismiss the said Civil appeal filed by the respondent herein.
In view of the aforesaid orders passed by the Nationla Green Tribunal subsequently affirmed by the Hon'ble Supreme Court, the relevant authorities have been restrained from granting completion certificates to the respondent herein since 28.10.2013 till the time, the eco-sensitive zone is prescribed by the notification issue by the MoEF and consequent clearance is granted by the National Board of Wildlife. In view of the above, the respondent had to slow down the construction in all the sub projects so as to avoid huge adverse financial exposure in the event the clearance is not granted/or is delayed beyond reasonable time.
The aforesaid orders were in force from 14.8.2013 to 19.8.2015 (vide which the restrained in issuing completion certificates was removed due to notification of eco-sensitive zone of Okhla Bird Sanctuary being issued by MoEF) which compelled the respondent to go slow on construction due to total uncertainty in the mind of both the opposite party and the allottees. Despite the aforesaid embargo the respondent herein tried to complete the project to the best of its abilities and has completed the following till date:
Around 6000 apartments A 500 bedded hospital Higher Secondary School Golf course 18 holes and 9 hole, shopping complex All internal roads, electric, power back-up, water supply, sewer lines Security infrastructure Temporary club and Parks.
Even otherwise, the complainant can only be entitled to the compensation for delay in possession in terms of clause 7.2 of the standard terms and conditions and therefore, the prayers made in the instant complaint are clearly untenable as the complainant therein is trying to extort money towards excess interest beyond the agreed terms of the contract executed between the parties. Further, as has been established herein above, there is no fault on the part of the respondent herein and he delay has been only due to the orders passed by the National Green Tribunal subsequently affirmed by the Hon'ble Supreme Court as well as other factors not attributable to the respondent herein and therefore, the respondent cannot be directed to pay any compensation to the complainant herein.
It is evident that the complainant herein has deliberately suppressed material facts in his complaint had has made tales allegations against the respondent herein. It is therefore evident that he has not approached this Hob'ble Commission with clean hands and therefore the instant complaint is liable to be dismissed.
In view of above, it is evident that the respondent has always acted in a bonafide manner and has acted in a professional and efficient manner keeping the best interests of its consumer in sight. It is therefore, incorrect to allege that the respondent has committed any deficiency in service. On the other hand, it is the complainant who has filed the instant complaint as an afterthought, raising completely false and specious allegations in order to launch a malicious prosecution against the respondent herein and to extort illegal benefits on the basis of the same. Such illegal design of the complainant is clearly an abuse of the process of law and is liable to be rejected.
It is pertinent to mention that at the moment RERA Act, 2016 is enforces. The object of which is as under:
"An act to establish the real estate regulatory authority for regulation and promotion of the real estate section and to ensure sale of plot, apartment or building, as the case may be or sale of real estate project, in an efficient and transparent manner and to protect the interest of consumers in the real estate sector and to establish an adjudicating mechanism for speedy dispute redressal and also to establish the appellant tribunal to hear appears from the decisions directions or orders for the Real Estate Regulatory Authority and the adjudicating officer and for matter connected therewith or incidental thereto."
The present complaint filed by the complainant is not maintainable at this stage as the time provided by the promoter at the time registration under the RERA Act, 2016 for the completion of the project has not lapsed. It would be pertinent to mention here that as per section 4(2)(I)(C) of the RERA Act, the promoter at the time of registration of the project with the RERA Authority has to give declaration specifying therein apart from other things, the time period within which the undertakes to complete the project or the phases thereof, as the case may be. The authority, thereafter, on being satisfied with the undertaking given in the application form will grant Registration Certificate to the promoter as per Section 5(3) of the RERA Act and the same will remain valid for a period declared by the promoter under section 4(2)(I)(C). Jaiprakash Associates Limited herein has in its declaration made at the time of registration of the project in question has undertaken to complete the project in question on or before 31.3.2020 and he was also duly granted the Registration Certificate for this project. Thus, Jaiprakash Associates Limited cannot be held liable at the present stage. The liability of answering respondent can be considered after the said period has lapsed and promoter is unable to complete the said project within the given time frame. Further, as per section 7 of the RERA Act, the registration certificate issued by the RERA Authority can be revoked only if the promoter defaults in doing anything he is required under this Act or violates any terms or conditions of the approval given by the competent authority or is guilty of any unfair practice or irregularity. In the present case no such allegation has been leveled against Jaiprakash Associates Limited and the Jaiprakash Associates Limited is making its fullendevour to complete the project in question with the stipulated time frame.
As per section 13 of the RERA Act, the promoter of a given project can only be held liable/penalized if he fails to abide by the commitment made by it to its allotees as per the agreement to sell entered between the parties. Thus, the rights and obligation inter se between the parties can culminate only through a written agreement to sell between the parties. Such an agreement to sell has to be in the format duly prescribed under rules by the appropriate Government. However, in the present case no such agreement to sell has been entered into between the parties as the format for the same has till date not been prescribed by the appropriate Government in U.P. as has been done by various other appropriate Government.
The complainant's unit in dispute bearing no.KSI008104 is part of project known as KASA ISLES at Jaypee Greens, Noida. The said unit was booked by the complainant much before the enforcement of RERA Act. It would also be pertinent to mention here that at the time of the booking the complainant had also signed the "Standard Terms and Conditions" which formed part of the application form. However, after coming into force of the RERA Act, a fresh agreement to sell containing the approved terms and conditions as prescribed by the appropriate Government, as provided under section 13 of the Act, has to be entered into between the "Buyer" and the "Promoter". All the rights and liabilities of the promoter and the buyer will be governed by the said agreement. Thus, the "Standard Terms and Conditions" referred above cannot take place of an agreement as provided in Section 13 of RERA Act. Consequently, RERA Authority cannot proceed with the instant case on the basis of standard terms and conditions applicable to parties much before the enforcement of RERA Act i.e. 1.5.2016. As per provisions of RERA Act, the issue relating to liabilities and obligations of the parties to dispute can only be decided on the basis of statutory agreement referred herein before.
It is submitted that as per section 18 of the RERA Act, 2016 a promoter is liable to return the amount paid by the allottee and is also liable to compensate it. If he fails to complete the project is unable to give possession of the apartment in accordance with the terms and of the agreement to sale. Recently, the Maharastra Real Estate Regulatory Authority has dismissed complaints filed by 15 home buyers against a promoters wherein they had sought refund of their money along with compensation as is been prayed by the complainant in the present complaint on the ground that the provisions of the Section 18 of the RERA Act, 2016 does not apply in the absence of the registered agreement for sale.
Admittedly, in the present complaint also no agreement for sale has till date been entered between the complainant and the respondent herein as the format for the same has till date not been prescribed by the State Government. Further, it is submitted that the expected date of delivery mentioned in the provisional allotment letter is of no consequence in the absence of a valid/registered agreement for sale. This position has been clarified by the Maharastra RERA Authority in theabove mentioned order passed by it in the case of 15 homes buyers. The promoter can only be held liable u/s 18 if he fails to deliver the project on the date specified in the registered agreement to sale entered into between him and the allottee.
It is also submitted that the Layout plan of the project in question has been duly sanctioned by NOIDA Authority and the same is valid upto 3.3.2020. Therefore, the registration certificate issued by the RERA Authority is which the date of completion of project has been mentioned as 31.3.2020 and which has been duly approved by the RERA Authority is a valid registration certificate and does not call for an interference by this Authority.
We have heard ld. Counsel for the complainant Mr. Abhishek Singh and ld. Counsel for the Opposite Party no.1 Mr. PratulPratap Singh. None appeared for the opposite parties no.2 & 3. We perused the pleadings, evidence and documents on record.
This case has been filed under Consumer Protection Act 1986. First we have to see the aim and object of the Consumer Protection Act.
This Consumer 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. The main objects of the consumer protection act are ;
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 . 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.
Listed below the responsibilities of the consumers 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 --
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 trade practices;
(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 it in 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.
Now the next question is regarding Arbitration Clause no 10.9 in the agreed terms and conditions for. It is argued by the opposite party that the matter should have been referred to an arbitrator. As far as Arbitration Act and Consumer Protection Act are concerned the following article and case laws will help to understand the dominance of the act.
RELATIONSHIP BETWEEN ARBITRATION ACT AND CPA In India, people are least aware with the consumer's rights and lags behind having low general understanding of arbitration as dispute resolution mechanism. The arbitration clause can curtail the grounds on which the consumers can raise the disputes, whereas on the other side the consumer protection act may grant the consumer various grounds on which he can file the complaint which may not be otherwise permitted in the standard form agreement having the arbitration clause.
Arbitration has equal bargaining powers and the resources at hand which makes it private, efficacious, and timely form of dispute resolution. Whereas in case of consumer disputes, the case is different, where they are exposed to the standard form agreements making them submit to the unfair or the repressive terms. They are several times made part of the one-sided arbitration clause, which is drafted keeping in mind the interest of one party only.
These days Indians are shifting to the online purchasing platform and being ignorant of not checking the agreements which makes them to be covered under the blanket provision and end up being the party to the arbitration. This makes less options opened for the consumer to resort to the statutory remedies which in turns endangers the interest of the consumers. This may also build the hostile market against the e-commerce in India. It may have the adverse effect not only on the Indian economy but also on the e-commerce giants who aims at invest in the growing market.
CONSUMER COURT AS A SPECIAL COURT It was held in the case of Aftab Singh v Emaar MGF Land Limited &Anr., that the provisions of the arbitration act does not apply to the consumer courts, as they are the special courts set up for the public purpose. In this case, the group of the home owners filed the complaint against Emaar MGF Land Private Limited (Builder) before NCDRC. The complaint was filed for the non-delivering the plots to the buyers as per the Buyers' Agreement. The builder filed the application under section 8 of the Arbitration and Conciliation Act, on the basis of the arbitration agreement made between the parties which was mentioned there in the Buyer's Agreement.
It was argued by the petitioner that the remedies provided under the Consumer Protection Act are not in exclusion of the existing laws, but are in addition to it, which has been sated in the case of National Seed Corporation Limited v M. MadhusudhanReddy( (2012) 2 SCC 506 ) . It was also argued that the consumer protection act is the piece of the legislation which intends to confer the benefits and it is the, for which the purpose should be advanced. Therefore, regardless of having entered into the arbitration clause, the consumer can invoke the section 3 of the Consumer Protection Act and bring the complaint to the consumer forum( Skypak Couriers Ltd. Vs. Tata Chemicals Ltd)[3].
The builder pleaded that the Consumer Courts act as the 'judicial authority' within the scope of section 8 of the Arbitration and Conciliation Act and therefore if there is any valid clause entered between the parties, then the consumer courts can refer the parties to the arbitration. And hence according to the act the consumer courts are obliged to bring the case for the arbitration, irrespective of the High Court and Supreme Court decisions. The NCRDC's full bench ruled that the arbitration act does not bars the consumer court's jurisdiction relying on the Supreme Court's judgement in the case of Booz Allen Hamilton Inc v. SBI Home Finance Ltd(2011) 5 SCC 532), which provided the country with the disputes that are not arbitrable. In this case, Supreme Court, came with the 7 categories of the disputes that are not arbitrable[5].
The commission also relied on the Supreme Court judgement in the case of A. Ayyasamy v. A Paramasivam(2016)10 SCC 386 ;N. Radhakrishnan v. Maestro Engineers) that the dispute will not be arbitrable if the civil court's jurisdiction has been exclusively given to a tribunal or the special court. The Consumer Courts were made to create an organized system for dispute between the people who possess the unequal power i.e. the consumer and the large corporations. The commission also pointed out the section 2(3) of the Arbitration and Conciliation Act which refers to the situations where the special categories of disputes are protected from being referred to the arbitration. Therefore this provision protects the Consumer disputes. The court concluded that if the court allows party to go for the arbitration and being in favor of the builder, it will defeat the goals and the main purpose of the Consumer Protection Act.
THE CONDITIONS PRIOR AND POST 2015 AMENDMENT TO SECTION 8 OF ARBITRATION AND CONCILIATION ACT Section 8 of the Arbitration and Conciliation Act states that the judicial authority can instruct the parties to go for arbitration in the case when there exists the arbitration clause in the arbitration agreement. It does not bars oust the jurisdiction of the Consumer Court, it will continue to hold and enjoy the jurisdiction irrespective of presence of an arbitration clause in the agreement.
The Supreme Court contented that there was no legislative intent of the amended provisions of the section 8(1) in the Arbitration and Conciliation Act, so as to override the other statutes which have the specific remedies. Neither it intends to make disputes related to trusts, criminal law, tenancy, telecom, family law, IPR, etc, as the arbitrable subject and to against the judgement of A Ayyasamy v A Parasivam&Ors(2016) 10 SCC 729 ) and Booz Allen Hamilton Inc. v SBI Home Finance Limited &Ors.(2011) 5 SCC 532 ) Supreme Court analyzed the situations prior to 2015 Amendment, related to referring the consumer disputes to arbitration. Supreme Court referred to the judgmentsprior 2015 which had the settled law in cases of Fair Air Engineering Pvt. Ltd &Anr V N K Modi (1996) 6 the SCC 385), National Seeds Corporation Limited v Madhusudhan Reddy &Anr (2012) 2 SCC 506) and Rosedale Developers Private Limited V Aghor Bhattacharya &Ors (2018) 11 SCC 337). These cases held that even if the dispute arise from the contract having the arbitration clause, it will not impede the parties to resort to file a complaint before the consumer forum under Consumer Protection Act. All of the judgements had the rationale that provision of section 3 of Consumer Protection Act states that "the provision is in addition to, and not in the derogation of any other law for the time being in force."
The Supreme Court acknowledged the 2015 amendment which restricted the power of any judicial authority to refuse to refer the dispute to arbitration under section 8(1) and appointment of arbitrator under section 11(6A) and also acknowledged the fact that it invalidated the earlier precedent in the case of Sukanya Holding (P) Ltd v Jayesh H Pandya &Anr.( 2003) 5 SCC 531) Supreme Court considering section 2(3) of the arbitration act, states that the Part I of the arbitration act shall not affect any other law for the time being in force, by virtue of which certain disputes may not be submitted to the arbitration. Supreme Court stated that the legislative intent of 2015 Amendment was never to override section 2(3) of the Arbitration Act and other statute which offers the public remedy like that of CPA.The Supreme Court in 1994 already held that CPA is a beneficial legislation which provides the economical and expeditious remedies to the aggrieved consumer in the case of Lucknow Development Act V M K Gupta(1994) 1 SCC 243).
Referring to all of the above cases, the Supreme Court in this case affirmed that the decision given by NCDRC is valid and stated that the consumer dispute are the subject matter where the dispute cannot be referred to arbitration as it pertains to rights in rem (public rights). It comes under the ambit of the non-arbitrable dispute defined under Booz Allen and Ayyasamy case. The disputes are non-arbitrable in disputes related to criminal laws, tenancy, trusts, family law, telecom, IPR, insolvency and winding up, and in certain cases, fraud.
CONCLUSION AND CRITICS OF THE CASE It can be ensured with the judgement that consumers who have lesser bargaining power than that of the service providers shall not be pushed towards the relatively cumbersome process of the arbitration where there can be other more affordable and efficacious low public law remedies available. The CPA is a special legislation which has the public law remedies dealing with the rights under the umbrella of "right in rem" which has been espoused by Booz Allen. The case had many critics for it, as it was delivered during the course of time, when India has been continuously focusing upon the survival and the supremacy of the arbitration proceeding over litigation in the Indian dispute resolution. And it was the major reason that it appeared for some of the people as a diversion from the object of Indian arbitration system to be an arbitration-friendly hub. This also draws our attention towards the fact that the arbitration shall be made a more consumer-friendly method of dispute resolution. It is because of this judgement that people were able to depict the heightened element of the public interest consumer dispute in India.
[1]Review Petition (C) Nos. 2629-2630 of 2018 in Civil Appeal Nos. 23512-23513 of 2017 [2](2012) 2 SCC 506 [3]Skypak Couriers Ltd. Vs. Tata Chemicals Ltd [4](2011) 5 SCC 532 [5]Vimal Kishore Shah v Jayesh Dinesh Shah (2016) 8 SCC 788 [6] (2016)10 SCC 386 ;N. Radhakrishnan v. Maestro Engineers [7](2016) 10 SCC 729 [8](2011) 5 SCC 532 [9](1996) 6 the SCC 385 [10] (2012) 2 SCC 506 [11](2018) 11 SCC 337 [12](2003) 5 SCC 531 [13](1994) 1 SCC 243 So it is clear that The Consumer Protection Act is a special type of act and even if there is a clause of arbitrator in the application form, it will not oust the jurisdiction of the consumer courts. So this court has jurisdiction to try the case.
It is also clear that the complainant has deposited a good amount of money towards this flat. In the provisional allotment letter dtd 21.07.10 the opposite party has promised to deliver the possession of the said within 36 months many thereby that the possession was to be given by 20 July 2013. The opposite party failed to honour his promise. Six now the opposite party has brought the story of Yamuna Express way, story of Jayprakash associates and infratecetcetc . We have seen the receipt dtd 03.07.2010 which has been issued for Jaiprakash associates Ltdand it is for an amount of rupees 3 lakhs. Provisional allotment letter dtd 21.07.2010 has been issued jointly by Jaiprakash Associates Ltdand Jaypee Infra Tech Ltd , meaning thereby that both the firm jointly and severally liable for this transaction. Now the story of moratorium etc in relation to Jaypee Infra Tech Ltd has nothing to do with this joint responsibility. Jaiprakash Associates Ltd has issued the first receipt of ₹ 3 lakhs so he has collected the money from the complainant and if letter on some other party comes in picture and collect money, the matter rates between those two individuals and not between complainant and opposite party no 1.
In the light of above mentioned facts we have to see the latest judicial pronouncement of Hon'ble NCDRC in First Appeal no 380 of 2019 , Judgement dated 26.09.22 Jaiprakash associates Ltd Vs Deepti Kumar & two ors. In this case the matter rates to " Garden Isles" and in the present case the matter rates to " Kasa Isles". Both these Isles are stated in JP Greens .So they are very much closely related to each other. The Hon'ble NCDRC has held in this case , "ThecomplainantstatedthatJaypeeInfratechLimited(respondent-2)andJaiprakashAssociatesLimited(theappellant)(hereinafterreferredtoasthebuilders)werecompanies,registeredunderCompaniesAct,1956andengagedinthebusinessofdevelopingandconstructinggrouphousingproject.Theylaunchedagrouphousingprojectinthenameof"GardenIsles"atJaypeeGreens,Sector-131&133,Noidaandmadewidepublicityintheyear2011.Alluredwithlucrativeadvertisementsandbelievingonit,thecomplainantappliedforaflatanddepositedtherequiredmoneyofRs.2.5/-lacson06.02.2012.ThebuildersprovisionallyallottedUnitNo.-GDI25-2103(superarea1205sq.ft.,BasicSalePriceofRs.4359690/-TotalConsiderationofRs.4898890/-,includingRs.2.5/-lacsforCarParkingSpace)on16.05.2012.Undertheallotmentletterdated16.05.2012,thebuilderspromisedtodeliverpossessionwithin42monthsfromthedateofallotment.Thebuildersprovidedsubventionscheme,underwhich,loanwasadvancedfromAxisBankLimited(oppositeparty-3).Aquadripartiteagreementdated29.06.2012wasexecutedbetweenthepartiesandAxisBankLimiteddirectlyadvancedRs.3889200/-on03.08.2012tothebuilders.ThecomplainantpaidRs.490000/-on18.06.2012,Rs.134233/-onRs.29.08.2012andRs.12847/-on28.03.2013(totalRs.4776280/-includingloanamount).The periodof42monthsexpiredon16.11.2015andgraceperiodof180daysasgivenunderClause-
7.2ofStandardTermsandConditionsexpiredon16.05.2016.ThebuildersdidnotgiveanyinformationregardingprogressoftheconstructionnorofferedpossessiontillthenandpaiddelayedcompensationasperClause-7.2.Thecomplainant,videletterdated01.09.2016inquiredaboutdateofdeliverypossessionandrequestedforpaymentofdelayedcompensationbutthebuildersdidnotrespond.Thenthecomplaintwasfiled,claimingdeficiencyinserviceandunfairtradepractice.
TheappellantandJaypeeInfratechLimited(respondent-2)fileditsjointwrittenreplyinthecomplaint,inwhich,materialfactsrelatingbooking/allotmentoftheflatandpaymentsmadebythecomplainant,includingmoneyadvancedbyAxisBankLimitedhavenotbeendisputed.However,theytookpleathatthecomplainantmadepaymentwithdelayforwhich,shewasliabletopayinterestofRs.78515/-.Theydeniedofcommittingdeficiencyinserviceandunfairtradepractice.TheystatedthatTajExpresswayProjectwasconceivedbyGovernmentofU.P.,intheyear2002,forconnectingNoidatoAgra.Theprojectalsoenvisageddevelopmentof25millionSq.Mtrs.landalongwiththeexpresswayon"Build-Operate-Transfer"basis,forwhichbidswereinvited.BidofM/s.JaiprakashIndustriesLimitedwaslowestassuchtheprojectwasawardedtoitandConcessionAgreementdated07.02.2003wasexecutedbetweenTajExpresswayAuthority(nowrenamedasYamunaExpresswayIndustrialDevelopmentAuthority)andM/s.JaiprakashIndustriesLimited.Byaschemeofamalgamation,approvedbyAllahabadHighCourt,videorderdated10.03.2004,M/s.JaiprakashIndustriesLimitedwasamalgamatedwithJaypeeCementLimitedw.e.f.01.04.2002andthenameofJaypeeCementLimitedwaschangedasJaiprakashAssociatesLimitedw.e.f.11.03.2004.StateofU.P.appointedanEnquiryCommissionofJusticeSiddheshwarNarayan(retd.)tolookintotheConcessionAgreement.Hesubmittedhisreportdated12.10.2006,recommending,setupaSpecialPurposeVehicle,forthepurposesofcarryingouttheproject.AsperdirectionofYamunaExpresswayIndustrialDevelopmentAuthority,inthelettersdated06.11.2006and15.02.2007,JaypeeInfratechLimitedwasincorporatedon05.04.2007asaSpecialPurposeVehicleforcompletionoftheproject.ByProjectTransferAgreementdated19.10.2007(registeredon17.12.2007),thedevelopmentworkoftheprojectofexpresswayfromNoidatoAgrawasassignedtoJaypeeInfratechLimited,whowasrequiredtofundtheProjectbydevelopmentandsaleofflats/landinfivetownships.Entirelandfordevelopmentatfivelocations,includingthelandofJaypeeGreensWishTownProjectwasleasedtoJaypeeInfratechLimitedon27.11.2007.ADevelopmentAgreementdated01.05.2009wasexecutedbetweenJaypeeInfratechLimitedandJaiprakashAssociatesLimited,underwhichtaskofdevelopment,construction,marketing,saleetc.wereassignedtoJaiprakashAssociatesLimited.Afterobtainingnecessaryapproval,developmentworkofthe"GardenIsles"wasstarted.However,forthereasonsbeyondtheircontroli.e.duetoforcemajeureevents,viz.shortageoflabour,scarcityofwater,restrictionsinexcavations,villager'sagitations,legalimpedimentsetc.,theconstructionwasdelayed.Thefundingofthedevelopmentoftheprojecthadtobedonepartlyfromsaleofapartmentandpartlyfromsaleofland.Intheyear2010,saleofparcelsoflandwashaltedandseriouslawandorderproblemwascreatedduetofarmer'sagitation.Governmentof U.P.issuedorderdated29.08.2014forpaymentofadditionalincentiveof64%tothefarmers,whichresultedtotalscarcityoffundsfordevelopmentoftheproject.Thevillagersstoppedtheworkofdevelopmenttillpaymentoftheamount.StateGovernmentdecidednottohandovertheExpresswayconnectingNoidaandGreaterNoidatothebuildersin2012,resultingsubstantialloss ofrevenuetoJaypeeInfratechLimited.NationalGreenTribunal,videorderdated11.01.2013,restrainedallthebuildersofNoidaandGreaterNoidafromextractingundergroundwater.
NationalGreenTribunalvideorderdated14.08.2013,restrainedallconstructionworkswithinaradiusof10kmfromOkhlaBirdSanctuaryandvideorderdated28.10.2013restrainedtheauthoritiesfromgrantingcompletioncertificatetoanybuilding.Byanorderdated03.04.2014directedtheauthoritiestocreateaneco-sensitivezoneforOkhlaBirdSanctuary.Thebuildersfiled M.A.No.240of2014formodificationoftheorderdated03.04.2014,whichwasrejectedon30.05.2014.AgainsttheseordersCivilAppealNos.5822-5823of2014werefiled,whichweredismissedbySupremeCourton10.06.2014.StateGovernmentnotifiedeco-sensitivezoneon19.08.2015.UnderClauses-7.1and7.2ofStandardTermsandConditions,thebuilderswereentitledforextensionofperiodforwhichtheconstructionwasobstructedduetoforcemajeurecauses.ThebuildersgaveadiscountofRs.327760/-tothecomplainantasperClause-7.2ofStandardTermsandConditionsandthebuildersthroughoutactedinfairandbonafidemanner.Therewasnounfairtradepractice.ThebuilderswerereadytorefundtheamountasperStandardTermsandConditions.Thebuilderswereknownfortheirqualityandcommitmentandtheyweretryingtocompletetheprojectandhandoverpossessionattheearliest.Thepreliminaryissuesthatthecomplainanthadbookedtheflatforcommercialpurpose,asisprovedfromthefactthatduetodownfallofmarketinrealestate,thecomplaintwasfiledforrefundofmoneyandnotforpossessionandsheisnotaconsumerandStandardTermsandConditionscontainedanarbitrationclauseandsheberelegatedforarbitration,havealsobeenraised."
" 9. ThecounselfortheappellantsubmittedthatNationalCompanyLawTribunal,AllahabadhasdeclaredmoratoriumagainstJaypeeInfratechLimited,videorderdated09.08.2017undertheCode,2016andtheproceedingisstillgoingon.Section-63barsjurisdictionofCivilCourtandbyvirtueofSection238,theprovisionsoftheCode,2016haveoverridingeffect.SupremeCourtinHirakundIndustrialWorksVs.VarshaFabrics(P)Ltd.(2020)14SCC198andGhanshyamMishraandsons.Pvt.Ltd.Vs.EdelweissARCLtd.(2021)9SCC657,heldthattheprovisionsoftheCode,2016hadoverridingeffectoverallotherstatuteincludingConsumerProtectionAct,1986.TheremedyofthehomebuyeristosubmithisclaimbeforeInterimResolutionProfessional.DeeptiKumar(respondent-1)hassubmittedherclaimofRs.4776280/-alongwithinterest,on21.08.2017beforeInterimResolutionProfessional.Homebuyersare'financialcreditors'withinthemeaningofSection5(7)readwithExplanationtoSection5(8)(f)oftheCode,2016.CommitteeofCreditorsapprovedtheplanofSurakshaRealtyLimitedon09.07.2021,underwhich,SurakshaRealtyLimitedproposedtocompletetheprojectwithin40monthsandthehomebuyerswouldbegivenpossessionoftheirflatwithoutanydelayedcompensation.Resolutionofapprovaloftheplanisbindingonall'financialcreditors'.Inviewofmoratoriumdated09.08.2017,StateCommissionoughttohaveabatedtheproceedingofthecomplaintbeforeit.SomeofthehomebuyersfiledwritpetitionbeforeSupremeCourt,i.e.inChitraSharmaandothersVs.UnionofIndiaandothers,(2018)18SCC575,byfinalorder,SupremeCourtdeclinedtodisbursetheamountdepositedbytheappellanttothehomebuyersofJaypeeInfratechLimited,holdingthathomebuyerswere'financialcreditors'andmemberofCommitteeofCreditorsanddirectingthemtosubmittheirclaimbeforeInterimResolutionProfessional.SupremeCourtinInnoventiveIndustriesLimitedVs.ICICIBankandanr.,(2018)1SCC407,heldthattheCode,2016isacompletecode.UnderSection-28oftheCode,2016,CommitteeofCreditorssupervisestheaffairsofInterimResolutionProfessional,inrespectofcorporatedebtor.UnderSection30(4)oftheCode,2016,theresolutionplanhastobeapprovedbyCommitteeofCreditorsbyamajorityvotingshareofatleast66%.Inthepresentcase,thereweremorethan21000homebuyer'svotes.CommitteeofCreditorshasapprovedtheplanofSurakshaRealtyLimitedon09.07.2021,underwhich,homebuyerwouldbegivenpossessionoftheirflat.ThisisbindinguponthemasheldbySupremeCourtinJaypeeKensingtonBoulevardApartmentWelfareAssociationandothersVs.NBCC(India)Ltd.andors.,(2021)SCCOnLineSC253.InCommitteeofCreditorsofEssarSteelIndiaLtd.Vs.SatishKumarGupta,(2020)8SCC531,heldthatCommitteeofCreditorsalonesdeterminesitsfeasibilityandviabilitybasedonitsowncommercialwisdom.EvenNationalCompanyLawTribunalhaslimitedjurisdictiontointerferewiththeapprovedplan.ItisnotopenforthehomebuyertoclaimflatfromJaypeeInfratechLimitedandalsotakerefundfromJayprakashAssociatesLimited.SupremeCourtinSAILVs.UnionofIndia,(2006)12SCC233,heldthatalitigantisestoppedfromraisinginconsistentandmutuallydestructiveplea.RelyinguponDevelopmentAgreementdated01.05.2009,executedbetweenJaypeeInfratechLimitedandJaiprakashAssociatesLimited,inwhichtaskofdevelopment,construction,marketing,saleetc.wereassignedtoJaiprakashAssociatesLimitedaswellasvariousclausesofprovisionalallotmentletterandStandardTermsandCondition,ithasbeensubmittedthatJaiprakashAssociatesLimitedwasanagentofJaypeeInfratechLimited.ThehomebuyerpaidentiremoneytoJaypeeInfratechLimited.ThisCommissionhastakenviewthattheperson,whohadreceivedmoney,wasliabletoreturnit.In viewofSection230ofContractAct,1872,recoveryproceedingcannotbeinitiated/continuedagainstanagentfortheactsofadisclosedprincipal.HerelieduponthejudgmentsinMarineContainerServicesSouthPvt.Ltd.Vs.GoGoGarments,(1998)3SCC247,PremNathMotorsVs.AnuragMittal,(2009)16SCC274,VivekAutomobilesVs.IndianInc.,(2009)17SCC657,forthepropositionthatanagentcannotbeheldliablefortheactsofadisclosedprincipal.Clause-9.1.5ofStandardTermsandConditionsprovidesforreturnofthemoneywithoutanyinterestorcompensationandearnestmoney.StateCommissionhasillegallydirectedforpaymentofinterest@18%perannum.DelaywascausedforthereasonsofforcemajeureandtheperiodwasliabletobeextendedunderCluase-7.1ofStandardTermsandConditions.ThejudgmentsofthisCommissioninCC/1495/2015,ArvindDhingraVs.JAL(decidedon01.10.2018)hasbeensetasidebySupremeCourt.CC/2194/2016AnishSinghalVs.JAL(decidedon01.10.2019)wasnotrelatedtotheprojectofJaypeeInfratechLimited.JudgementinCC/11320-11329/2018GauravGoel&anr.vs.JALwaschallengedinCivilAppealDiaryNo.
5804of2020,whichwasdecidedintermsofsettlementvideorderdated25.10.2021.JudgmentinCC/976/2017RajeevKumarSinghVs.JAL,(decidedon15.06.2020)hasbeenstayedbySupremeCourtinCivilAppealNo.4724-4725of2021,videorderdated16.08.2021.Noneofthesejudgmentscanbeconsideredasbindingprecedent.JudgmentofAnjaliRathiVs.TodayHomes,(2021)SCCOnLineSC729,isdistinguishableasthepromoterhadgivenundertakingbeforeSupremeCourttobeartheliability,inthatcase.
ThecomplainantdoesnotdisputethatNationalCompanyLawTribunal,AllahabadhasdeclaredmoratoriumagainstJaypeeInfratechLimited,videorderdated09.08.2017undertheCode,2016andtheproceedingwasgoingon.However,thecomplainantarguedthatJaiprakashAssociatesLimitedwasoneofajointpromisorassuchheisseverallyliabletorefundtheamountunderSection43oftheContractAct,1872.JaiprakashAssociatesLimitedwasthe'promoter"asdefinedundertheRealEstate(RegulationandDevelopment)Act,2016andthecomplainantisentitledtoclaimrefundofmoneyfromhimunderSection19(4)ofthisAct.ThecomplaintisnotliabletobeabatedduetopendencyofinsolvencyproceedingagainstJaypeeInfratechLimitedastheappellantisindependentlyliabletoreturnthemoney.
13. UnderSection-14(a),institutionofsuitetc.againstcorporatedebtorcanbeprohibitedwhileunderSection-14(b)prohibitioncanbeimposeduponthecorporatedebtorfromtransferringetc.itsassets.SupremeCourtinChitraSharmaandothersVs.UnionofIndiaandothers,(2018)18SCC575andJaypeeKensingtonBoulevardApartmentWelfareAssociationandothersVs.NBCC(India)Ltd.andors.,(2021)SCCOnLineSC253.,didnotheldthattheproceedingagainsttheappellantforrefundofmoneyisliabletobeabated/stayedduetopendencyofproceedingundertheCode,2016,againstJaypeeInfratechLimited.Innoneofthecases,relieduponbytheappellant,ithasbeenheldthattheproceedingagainstapromoterorco-promisorforrefundisliabletobeabated/stayedduetopendencyofproceedingundertheCode,2016,againstJaypeeInfratechLimited.AforesaidprovisionsoftheCode,2016barsuitetc.againstcorporatedebtoronlynotagainsttheappellant,whowasnotacorporatedebtor.
15. Section43oftheContractAct,1872andtherelevantprovisionsoftheRealEstate(RegulationandDevelopment)Act,2016arequotedblow:-.
"Section43.Anyoneofjointpromisorsmaybecompelledtoperform-Whentwoormorepersonsmakeajointpromise,thepromisemay,intheabsenceofexpressagreementtothecontrary,compelany[oneormore]ofsuchjointpromisorstoperformthewholeofthepromise.
Eachpromisormaycompelcontribution.-Eachoftwoormorejointpromisorsmaycompeleveryotherjointpromisortocontributeequallywithhimselftotheperformanceofthepromise,unlessacontraryintentionappearsfromthecontract.
Sharing of loss by default in contributions.-if any one of two or more joint promisors makesdefault in such contribution, the remaining joint promisors must bear the loss arising from suchdefaultinequalshares.
Explanation-Nothinginthissectionshallpreventasuretyfromrecovering,fromhisprincipal,paymentsmadebythesuretyonbehalfoftheprincipal,orentitletheprincipaltorecoveranythingfromthesuretyonaccountofpaymentmadebytheprincipal.
TheRealEstate(RegulationandDevelopment)Act,2016 Section:2(zk)"promoter"means,--
apersonwhoconstructsorcausestobeconstructedanindependentbuildingorabuildingconsistingofapartments,orconvertsanexistingbuildingorapartthereofintoapartments,forthepurposeofsellingallorsomeoftheapartmentstootherpersonsandincludeshisassignees;or apersonwhodevelopslandintoaproject,whetherornotthepersonalsoconstructsstructuresonanyoftheplots,forthepurposeofsellingtootherpersonsallorsomeoftheplotsinthesaidproject,whetherwithorwithoutstructuresthereon;or anydevelopmentauthorityoranyotherpublicbodyinrespectofallotteesof--(a)buildingsorapartments,asthecasemaybe,constructedbysuchauthorityorbodyonlandsownedbythemorplacedattheirdisposalbytheGovernment;or
(b)plotsownedbysuchauthorityorbodyorplacedattheirdisposalbytheGovernment, forthepurposeofsellingallorsomeoftheapartmentsorplots;or(iv)anapexStatelevelco-operativehousingfinancesocietyandaprimaryco-operativehousingsocietywhichconstructsapartmentsorbuildingsforitsMembersorinrespectoftheallotteesofsuchapartmentsorbuildings;or anyotherpersonwhoactshimselfasabuilder,coloniser,contractor,developer,estatedeveloperorbyanyothernameorclaimstobeactingastheholderofapowerofattorneyfromtheownerofthelandonwhichthebuildingorapartmentisconstructedorplotisdevelopedforsale;or suchotherpersonwhoconstructsanybuildingorapartmentforsaletothegeneralpublic.
Explanation.--Forthepurposesofthisclause,wherethepersonwhoconstructsorconvertsabuildingintoapartmentsordevelopsaplotforsaleandthepersonwhosellsapartmentsorplots aredifferentperson,bothofthemshallbedeemedtobethepromotersandshallbejointlyliableassuchforthefunctionsandresponsibilitiesspecifiedunderthisActortherulesandregulationsmadethereunder;"
Section19.Rightsanddutiesofallottees;(1)............
(2)....................
(3).....................
(4)TheallotteeshallbeentitledtoclaimtherefundofamountpaidalongwithinterestatsuchrateasmaybeprescribedandcompensationinthemannerasprovidedunderthisAct,fromthepromoter,ifthepromoterfailstocomplyorisunabletogivepossessionoftheapartment,plotorbuilding,asthecasemaybe,inaccordancewiththetermsofagreementforsaleorduetodiscontinuanceofhisbusinessasadeveloperonaccountofsuspensionorrevocationofhisregistrationundertheprovisionsofthisActortherulesorregulationsmadethereunder.
. UnderDevelopmentAgreementdated01.05.2009,taskofdevelopment,construction,marketing,saleetc.ofthevariousprojectsofJaypeeInfratechLimitedwereassignedtoJaiprakashAssociatesLimited,whowasalsosharingtheprofitoncostplusbasis.UnderProvisionalallotmentletterandStandardTermsandConditions,JaiprakashAssociatesLimitedhaspowertocancelallotmentofthehomebuyer.Inparagraph-8(ii)ofthewrittenreply,theappellanthasstatedthatJaypeeInfratechLimitedwasitssubsidiarycompany.Inparagraph-2ofmemorandumofappeal,theappellantclaimedtobeholdingcompanyofJaypeeInfratechLimited.However,theappellantarguedthatitwasanagentofJaypeeInfratechLimitedunderDevelopmentAgreement.
TheRealEstate(RegulationandDevelopment)Act,2016,hasbeenenactedtoprovidebetterprotectiontothehomebuyersinefficientandtransparentmanner.TheappellantfallswithinthedefinitionofthepromoterunderthisAct.ThehomebuyerisentitledtoclaimrefundofmoneywithinterestfromtheappellantunderSection-19(4)oftheRealEstate(RegulationandDevelopment)Act,2016.TheprovisionsoftheCode,2016donotbarinitiationofproceedinganditscontinuationforrefundagainstthepromoter.RealEstate(RegulationandDevelopment)Act,2016isaspeciallaw.Evenif,forthesakeofarguments,itistakenthattheappellantwasanagentofJaypeeInfratechLimitedundertheDevelopmentAgreement,thenalsotheappellantisfallingwithinthedefinitionof"promoter"asgivenunderRealEstate(RegulationandDevelopment)Act,2016.SpecialLawwillprevailovergenerallawasheldbySupremeCourtinVodaphoneIdeaCellularLtd.Vs.AjayKumarAgrawal,(2022)6SCC496.ThepositionoftheappellantaspromoterandliabilitytorefundSection-19(6)ofRealEstate(RegulationandDevelopment)Act,2016willoverrideoveritspositionasanagentofJaiprakashInfratechLimited.Theappellantbeingaco-promisorisjointlyandseverallyliabletorefundthemoneytothehomebuyerunderSection43oftheContractAct,1872.InPioneerUrbanLandandInfrastructureLtd.andOrs.Vs.UnionofIndia,(2019)8SCC416,heldthatRERAandIBCareparallelremedy.
SupremeCourtinBankofIndiaVs.KetanParekh,(2008)8SCC148andS.VanithaVs.DeputyCommissioner,Bengaluru,2020SCCOnLineSC1023,heldthatthecasesmightarise, whereboththeenactmentshavethenon-obstanteclause,theninthatcase,properperspectivewouldbethatonehastoseethesubjectandthedominantpurposeforwhichthespecialenactmentwasmadeandincasethedominantpurposeiscoveredbythatcontingencythennotwithstandingthattheActmighthavecomeatalaterpointoftime,stilltheintensioncanbeascertainbylookingtotheobjectsandreasons.
RelyinguponthejudgmentsofthisCommissioninCC/3879-3880/2017DeepakAgrawalandOrs.Vs.ThreeCShelters(decidedon21.01.2020)andCC/1702/2016ShalabhNigamVs.OrrisInfrastructurePvt.Ltd.andOrs.(decidedon06.05.2019),thecounselfortheappellantsubmittedthatthepersonwhohadreceivedthemoneywouldbeliabletorefund.Werespectfullydisagreewithit,inasmuchasithasnottakennoticeofSection43oftheContractAct,1872,whereco-promisorisjointlyandseverallyliable,Section-19ofRealEstate(RegulationandDevelopment)Act,2016,wherethepromoterisindividuallyliableandwellsettledprincipleoflawoftortrelatingtovicariousliability.(SeeCanaraBankVs.CanaraSalesCorporation,(1987)2SCC666andPradeepKumarVs.PostMasterGeneral,(2022)6SCC351.)Assuchthesecasesareperincurium.
SurakshaRealtyLimitedinitsPlandated09.07.2021proposedthecompletetheprojectwithin40monthsandthehomebuyerswouldbegivenpossessionoftheirflatswithoutanydelayedcompensation.Duedateofpossessionwas16.05.2016asperallotmentletterdated16.05.2012.SupremeCourtinBangloreDevelopmentAuthorityVs.SyndicateBank,(2007)6SCC442,FortuneInfrastructureVs.TrevorD'Lima,(2018)5SCC442,KolkataWestInternationalCityPvt.Ltd.Vs.DevasisRudra,2019SCCOnLineSC438andPioneerUrbanLand&InfrastructureLtd.Vs.GovindRaghavan,(2019)5SCC725,heldthatahomebuyercannotbemadetowaitforpossessionoftheflatforindefiniteperiod.
InviewoflawlaiddownbySupremeCourt,thehomebuyerisentitledtoclaimrefundofhismoneyalongwithinterestincaseofunreasonabledelayinhandingoverpossession.However,StateCommissionhasawardedinterest@18%perannum,whichisonhigherside.CompensationofRs.20000/-formentalagonywasalsonotpayable.SupremeCourtinBangloreDevelopmentAuthorityVs.SyndicateBank,(2007)6SCC442,heldthatinthematterofcontractualobligation,thereisnoscopeforcompensationformentalagonyandharassment.InDLFHomesPanchkulaPvt.Ltd.Vs.D.S.Dhanda,II(2019)CPJ117(SC)heldwheninterestisawardedascompensationinthecasesofrefundofmoney,thenawardingadditionalcompensationwasnotjustified.NowSupremeCourtinthecasesofIreaoGraceRealteck(P)Ltd.Vs.AbhishekKhanna,(2021)3SCC241andCivilappealNo.2324of2021M/s.BarnalaBuildersandPropertyConsultantsVs.Lt.Col.SameerBalodi(decidedon06.06.2021),fixedtheinterest@9%perannuminthecasesofrefund.
ORDER Inviewoftheaforesaiddiscussions,theappealispartlyallowed.TheorderofStateCommissiondated24.10.2018ismodified.Theappellantisdirectedtorefundentireamountdepositedbythecomplainantwithinterest@9%perannumfromthedateofrespectivedeposittillthedateofactualpayment,withinaperiodoftwomonthsfromthedateofthisjudgment.Respondent-1wouldalsobeentitledforaconsolidatedcostofRs.20000/-.Whilemakingpayment,loanofAxis BankLimitedshallbeadjustedfirst."
Now it has been the opposite parties are liable for the compensation and damages. The opposite parties totally failed to carry out their promise and the complainant cannot be left has/for long period. There is clear divisions on the part of the opposite parties and it is a matter of unfair trade practice and unfair contract. What should be the amount of compensation and what should be the rate of interest, will depend on the facts and circumstances of each case as held by on the Supreme Court in the following judgement, Hon'ble Supreme Court has held in Ghaziabad Development Authority Vs Balbir Singh (2004) 4 SCC 65-
"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."
"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[(2005) 9 SCC 430] and Haryana Urban Development Authority vs Darsh Kumar[(2005) 9 SCC 449], 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."
Hon'ble Supreme Court in the case of Haryana Urban Development ... vs Darsh Kumar, Etc. Etc , Civil Appeal no 5796 of 2002 decided on on 28 July, 2004 has held ;
"This Court has, in the case of Ghaziabad Development Authority vs. Balbir Singh reported in (2004) 5 SCC 65, deprecated this practice. This Court has held that interest at the rate of 18% cannot be granted in all cases irrespective of the facts of the case. This Court has held that the Consumer Forums could grant damages/compensation for mental agony/harassment where it finds misfeasance in public office. This Court has held that such compensation is a recompense for the loss or injury and it necessarily has to be based on a finding of loss or injury and must co-relate with the amount of loss or injury. This Court has held that the Forum or the Commission thus had to determine that there was deficiency in service and/or misfeasance in public office and that it has resulted in loss or injury. This Court has also laid down certain other guidelines which the Forum or the Commission has to follow in future cases.
We are informed that in spite of there being no stay, to payment of interest beyond 12% and in spite of clarification given by this Court's order (reported in (2004) 5 SCC 65), the amounts have still not been paid. We feel that for the lapse Appellants must pay interest at the rate of 15% from 17th March, 2004 till payment. Appellants shall also pay costs fixed at Rs.500/- in each case to the Legal Aid Society of the Supreme Court. The Appellants must recover the amount paid towards costs personally from the officer/s, who were responsible for not paying even after clarification by this Court. We clarify that this Order shall not be taken as a precedent in any other matter as the order has been passed taking special features of the case into account. The Forum/Commission will follow the principles laid down by this Court in the case of Ghaziabad Development Authority vs. Balbir Singh (supra) in future cases. The Appeals are disposed off in above terms. There will be no order as to costs."
So it is clear that the compensation and rate of interest shall depend on the facts and circumstances of each case and no hard and fast rule can be framed. In this connection some of the judgement of the Supreme Court and Hon'ble NCDRC should be taken into account.
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."
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. Now in the background of all the facts and also the facts of the present case, we will also discuss something more. We should also see the objects of the Consumer Protection Act 1986."
After taking account the main objects of the Consumer Protection Act, the composite the present case. The opposite party has objected that this flat has been taken by the complainant for the commercial use. As per his version, the complainant has booked a flat in some scheme in his name and now the second flat has been booked by him. After perusal it is clear that this flat has been booked by joint name of complainant and his wife while the other was only in the name of the complainant. It does not prove that this flat has been taken for commercial use or for reselling.
Now we take the facts and circumstances of the present case. In this case the complainant paid ₹ 3,910,439/- against the total price of ₹ 5,014,170/, so about 75% of the basic cost has already been paid by the complainant and he did not get the possession of the flat as promised by the opposite party within the time limit framed by the opposite parties which was 36 months. After considering all the above-mentioned judgements of the Hon'ble Supreme Court and Hon'ble NCDRC we are of the opinion that the complainant is entitled for the following reliefs:-
The complainant is entitled to get possession of the flat as allotted provisionally bearing unit number KSA 08 -104 in "Kasa Isles" at Jaypee Greens Noida within eight weeks from the date of judgement of this complaint case on depositing the rest amount of ₹ 5,014,170/ and if the possession was not deliver to him with completion and occupancy certificate , complainant will be entitled to get ₹ 1 lakh per month after eight weeks from the date of judgement ..
In Alternative complainant is entitled to get the present market value of the flat that exist today as per valuer report with interest at a rate of 9% on this amount from 21.07.2013 till actual payment.
The complainant is entitled to get ₹ 15,000 per month starting from 21.07.2013 till the date of actual payment with interest at a rate of 10% per annum and it should be paid within eight weeks from the date of judgement of this complaint case and if not paid within eight weeks from the date of judgement of this complaint case, the complainant will be entitled for interest at a rate of 15% from 21.07.2013 till the date of actual payment.
The complainant is entitled to damages ₹ 1.5 lakhs as per judgement of the Hon'ble Supreme Court.
For relief number five we are of the opinion that the complainant is entitled to get ₹ 30 lakhs from the opposite parties within eight weeks from the date of judgement of this complaint case towards the mental torture, agony, harassment and depression and this amount if not paid within eight weeks from the date of judgement, the complainant will be entitled to receive interest at a rate of 10% on this amount after eight weeks from the date of judgement of the complaint case.
Therefore the complaint case is allowed accordingly and the following order is being passed .
ORDER The opposite parties are directed jointly and severally to hand over the possession of flat as allotted provisionally bearing unit number KSA 08 -104 in "Kasa Isles" at Jaypee Greens Noida within eight weeks from the date of judgement of this complaint case on depositing the balanc amount of ₹ 5,014,170/ and if the possession was not delivered to him with completion and occupancy certificate , the opposite parties shall pay damages at a rate of ₹ 1 lakh per month after eight weeks from the date of judgement ..
In Alternative the opposite parties are that jointly and severally to pay the amount of the flat at market rate as exist today on the basis of a valuer of report within eight weeks from the date of judgement of this complaint case with interest at a rate of 9% on this amount from 21.07.2013 till actual payment.
The opposite parties jointly and severally are directed to pay ₹ 15,000 per month starting from 21.07.2013 till the date of actual payment with interest at a rate of 10% per annum and it should be paid within eight weeks from the date of judgement of this complaint case and if not paid within eight weeks from the date of judgement of this complaint case, the complainant will be entitled for interest at a rate of 15% from 21.07.2013 till the date of actual payment.
The opposite parties are jointly and should level to pay ₹ 1.5 lakhs as damages to the complainant which shall be paid within eight weeks from the date of judgement of this complaint case, and if not paid within eight weeks from the date of judgement of this complaint case, the opposite parties shall pay interest at a rate of 10% after eight weeks from the date of judgement of this complaint case till actual payment.
The opposite parties are jointly and severally are directed to pay ₹ 30 lakhs to the complainant towards mental agony, torture, cost of the case, harassment and depressionwhich shall be paid within eight weeks from the date of judgement of this complaint case, and if not paid within eight weeks from the date of judgement of this complaint case, the opposite parties shall pay interest at a rate of 10% after eight weeks from the date of judgement of this complaint case till actual payment.
All the decreetal amount shall be paid within eight weeks from the date of judgment of this complaint case, otherwise the opposite parties shall pay interest as mentioned in the judgement. If it is not paid within eight weeks from the date of judgment of this appeal, the complainant shall be entitled to present Execution proceedings before this court 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 October 06, 2022 JafRi, PA II C-2 [HON'BLE MR. Rajendra Singh] PRESIDING MEMBER [HON'BLE MR. Vikas Saxena] JUDICIAL MEMBER