National Consumer Disputes Redressal
M/S. Harsh Constructions & Anr. vs Sushma Vinay Bajpai on 22 December, 2023
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 161 OF 2019 (Against the Order dated 29/10/2018 in Complaint No. 102/2013 of the State Commission Maharashtra) 1. M/S. HARSH CONSTRUCTIONS & ANR. OFFICE AT 63/67, 4TH FLOOR, CARMELLOS BUILDING, PATHAKWADI, L.T. MARG, MARINE LINES, MUMBAI-400002 MAHARASHTRA 2. M/S. SIDDHIVINAYAK DEVELOPERS OFFICE AT 13, MRUDKISHOR, NEAR GOKUL SHOPPING CENTRE, NEAR DATTAPADA SUBWAY, BORIVALI, (WEST) MUMBAI-400092 MAHARASHTRA ...........Appellant(s) Versus 1. VINAY KUMAR G. BAJPAI R/O. B-09, THE PUNJAB CHS LTD., TAGORE ROAD, SANTACRUZE (WEST) MUMBAI-400054 MAHARASHTRA ...........Respondent(s) FIRST APPEAL NO. 164 OF 2019 (Against the Order dated 29/10/2018 in Complaint No. 101/2013 of the State Commission Maharashtra) 1. M/S. HARSH CONSTRUCTIONS & ANR. OFFICE AT 63/67, 4TH FLOOR, CARMELLOS BUILDING, PATHAKWADI, L.T. MARG, MARINE LINES, MUMBAI MAHARASHTRA 2. M/S. SIDDHIVINAYAK DEVELOPERS OFFICE AT 13, MRUDKISHOR, NEAR GOKUL SHOPPING CENTRE, NEAR DATTAPADA SUBWAY, BORIVALI (WEST) MUMBAI-400092 ...........Appellant(s) Versus 1. SUSHMA VINAY BAJPAI WIFE OF MR. VINAY KUMAR G. BAJPAI, R/O. B-09, THE PUNJAB CHS LTD., TAGORE ROAD, SANACRUZ (WEST), MUMBAI-400054 MAHARASHTRA ...........Respondent(s)
BEFORE: HON'BLE MR. SUBHASH CHANDRA,PRESIDING MEMBER HON'BLE AVM J. RAJENDRA, AVSM VSM (Retd.),MEMBER
FOR THE APPELLANT : FOR THE APPELLANTS : MR. P.N. PURI, ADVOCATE FOR THE RESPONDENT : FOR THE RESPONDENTS : MR. ASHWIN KATARIA, ADVOCATE
MR. GARVIT SOLANKI, ADVOCATE
Dated : 22 December 2023 ORDER
AVM J. RAJENDRA, AVSM, VSM (RETD.) MEMBER
1. The two Appeals, bearing Nos. FA/161/2019 and FA/164/2019 were filed by M/s. Harsh Constructions & Anr (Hereinafter referred as the "Appellants"/ "Opposite Parties") against Shri Vinay Kumar G. Bajpai and Smt Sushma Vinay Bajpai (Hereinafter referred as the "Respondents"/ "Complainants"). These Appeals challenge the Orders dated 04.09.2023 in CC/102/2013 and CC/101/2013, passed by State Consumer Dispute Redressal Commission, Maharashtra (hereinafter referred to as the "State Commission"). The State Commission had partly allowed both the Complaints.
2. Since the facts and questions of law involved in both Appeals are substantially similar, except for minor variations in dates, events and flat numbers, these Appeals are being disposed of by this common Order. Accordingly, for ease of reference, the FA No. 161 of 2019 is being considered as lead case, and the facts of the case are derived from Consumer Complaint No. 102/2013.
3. The case in brief, as per the Complainant, is that Mr. Vinay Kumar Bajpai had entered into an agreement with the OPs/Builder for purchase of Flat No. 1003, admeasuring 660 Sq. Ft (carpet area) on the 10th Floor of 'B-2' Wing in 'Divyam Heights' situated at Shreenath Nagar Andheri (West), Mumbai for total consideration of Rs.27,94,560 and paid Rs.7,26,586. An agreement to sell was executed on 08.02.2006 and registered on 01.04.2006. In terms of Clause 8 of the same, the OPs were to handover the possession of the flat by end June-2008. However, despite multiple requests and offers to pay the remaining sum, OPs failed to hand over the flat. Being aggrieved, he filed Consumer Complaint No. 102/2013 in the State Commission seeking an order directing the OPs to hand over possession of the flat, along with all necessary documents and pay compensation of Rs.1,000 per day from June 2008 until possession is handed over for hardships due to the delay and compensation of Rs.5,00,000 towards mental agony suffered.
4. The OPs, in their reply admitted the facts to the extent of booking of the flat, the agreed consideration, payment, execution of the agreement and issuance of receipts. However, they contended that there was no deficiency in their service. They pointed that certain Public Interest Litigations (PILs) were filed in the Hon'ble High Court concerning the property, including the area where the construction of the building was planned. The OPs further contended that the complainant had not paid the remaining consideration as requested, and therefore, she was not entitled to possession of the flat. They stated their willingness to refund the paid amount along with interest.
5. The learned State Commission on 29.10.2018 passed the following Order:
"(13) In view of answer to point nos.(i) to (iv) the consumer complaint deserves to be partly allowed and hence, we pass the following order:"
ORDER
(i) Consumer complaint is partly allowed with costs quantified at Rs.25,000 to be paid by the opponents jointly and severally to the complainant.
(ii) Opponents are jointly and severally directed to handover possession of flat bearing no. 1003 on 10th floor, B-2 Wing, building known as Divyam Heights to be constructed at Shreenath Nagar, Gilbert Hill Road, Andheri (West), Mumbai 400 058, admeasuring 660 sq. ft. carpet area to the complainant on payment of remaining consideration of Rs. 20,67,974/- by the complainant.
(iii) The complainant should deposit the remaining amount of Rs. 20,67,974 in this Commission for payment to the opponents and under intimation to the opponents. Within two months from the said payment the opponents should handover possession of the said flat to the complainant. On handing over possession of the flat the amount be given to the opponents.
(iv) Opponents are jointly and severally directed to pay interest @18% per annum on amount of Rs. 20,67,974 to the complainant from 1st January, 2013 till realisation.
(v) The opponents are jointly and severally directed to pay to the complainant Rs.2,00,000/- as compensation on account of mental agony suffered by the complainant.
6. Aggrieved by the Order of the State Commission, the Appellants filed this Appeal with the following prayer:
(a) accept the Appeal and set aside the Final Order dated 29.10.2018 passed by the Ld. State Consumer Dispute Redressal Commission, Maharashtra Mumbai in Consumer Complaint No; 102 of 2013; and
(b) pass any other or further orders as may deem fit and proper in the facts and circumstances of the case.
7. The Appellants mainly raised the following grounds:-
(a) The State Commission failed to consider that vide several letters dated 21.03.2006, 28.02.2008, 03.07.2008, 05.01.2010, 04.03.2010 the Appellants informed the Respondent about the construction progress and raising demands as per Clause 5 of the Agreement. Despite specific demands, he did not pay the amounts due. Thus, Appellant No. 1 terminated the Agreement vide letter dated 22.10.2012 and asked the Respondent to visit their office for refund of the amounts paid along with interest.
(b) The State Commission failed to recognize that the delay in handing over possession was due to force majeure conditions, including pending Public Interest Litigations (PIL) and Writ Petitions in the Bombay High Court and absence of necessary approvals from the Municipal Corporation of Greater Mumbai.
(c) The State Commission overlooked the mis-joinder of parties wherein even according to the knowledge of the Respondent, the Appellant No. 2 had no involvement. The Supplementary Agreement dated 09.11.2010 clarified that Appellant No. 1 was solely responsible for construction of B-1 & B-2 buildings, and Appellant No. 2 was only to develop B-3.
(d) The State Commission erroneously directed the Appellants to pay interest at 18% p.a. on the amount deposited by the Respondent from 01.01.2013 until realization. This decision contradicts the judgments of NCDRC and Hon'ble Supreme Court, starting from Ghaziabad Development Authority vs. Balbir Singh. Furthermore, the State Commission made an error in granting compensation of Rs. 2 lakhs to the respondent for alleged mental agony and harassment.
8. Upon notice on Memo of Appeal, the Respondent/ Complainant did not file any Reply.
9. In his arguments, the learned Counsel for the Appellants reiterated the grounds of appeal and argued that the State Commission failed to consider the Demand Letters sent by the Appellants to Respondent, which were left unanswered, indicating non-payment of the amounts due. He also emphasized that the Complainant did not provide any Rejoinder or Affidavit of Evidence to rebut the demands made by the Appellants. The construction resumed after High Court dismissed the Public Interest Litigation and Clause 8 of the agreement covered delays in such scenarios. The learned State Commission, in the impugned order, erroneously directed the Appellants to pay interest at 18% per annum on the amount deposited by the Respondent from 01.01.2013 till realization. This contradicted the orders of NCDRC and Hon'ble Apex Court Judgments starting from Ghaziabad Development Authority vs. Balbir Singh. Further, the State Commission also erred in granting compensation of Rs. 2 Lacs to the Respondents for purported mental agony and harassment.
10. The learned Counsel for the Respondent reiterated the facts in the complaint emphasizing that the delay and construction stoppage during the period 2006-2012 was allegedly due to pending PILs and Writ Petitions in the Hon'ble Bombay High Court. The Respondent contended that no evidence was furnished by the Appellants to substantiate that the construction could not proceed due to stay orders. Consequently, there has been an unreasonable delay of about 14 years by the Appellants. The Respondent urged that the present Appeal be dismissed, and the Appellants be directed to either provide possession of the said flat along with interest for the delay or, alternatively, be directed to compensate the Respondent based on the current market rate of the flat along with interest. He relied on Hon'ble Supreme Court in Wing Commander Arifur Rahman Khan v. DLF Southern Homes (P) Ltd., (2020) 16 SCC 512 in support of this argument. He further argued that the Complainant has paid the entire amount in compliance with the directions passed by the State Commission. However, the Appellants failed to handover the possession till date. The Appellants were directed to handover possession of the flat within two months of receipt of the pending payment. The Respondent has invested her hard-earned money and is suffering agony and harassment. He forcefully pleaded for dismissal of the Appeal directing the Appellants for providing possession of the said flat along with interest for the delay caused and further compensate for the agony caused. He has also stated that the flats have now been completed and the petitioner is ready to take possession.
11. We have examined the pleadings and associated documents placed on record and rendered thoughtful consideration to the arguments advanced by the learned counsels for both the parties.
12. It is an admitted position that the Appellants and Respondent have entered into an agreement for sale/ purchase of a flat bearing No. 1003, admeasuring 660 Sq Ft on the 10th Floor of 'B-2' Wing in the Project called "Divyam Heights" to be constructed at Shreenath Nagar, Gilbert Hill, Andheri (West), Mumbai from the OPs for an agreed consideration for of Rs.27,94,560. The Complainant paid Rs.7,26,585 out of total consideration. In terms of Para-8 of the said Agreement, the possession was to be handed over by June 2008 and the Respondent was ready to pay the remaining dues in terms of the Agreement, as per the progress of the construction.
13. It is the Appellant's contention that some PILs and litigations were filed in Hon'ble Bombay High Court and thus the construction of the project did not progress. They brought on record three Orders of Hon'ble Bombay High Court viz PIL No. 904/2005 filed by Ehsanul Haque A. Nadvi Vs. UOI & Ors, dismissed on 20.02.2008; PIL Writ Petition No.123 of 2006 filed by Gavdevi Durga Devasthan Trust Vs UOI & Ors, which was disposed of on 06.02.2008; and PIL No.57 of 2011 filed by Shail Rane & Ors Vs. State of Maharashtra & Ors, which was also disposed of on 09.02.2012.
14. It is evident that PIL No.904/2005 was filed prior to the parties in the present case entered into subject Agreement on 08.02.2006. When queried, the learned Counsel for Appellants clarified that there was no stay granted by the Hon'ble Bombay High Court in any of these cases against any construction activity, especially in respect of the construction project under dispute. In any case, the project ought to have been completed and possession was to have been handed over by end June 2008. Therefore, the PIL filed vide No. 57/2011 which in any case was disposed of on 09.02.2012 was of any consequence to the present case. Thus, the contention of the Appellants claiming that construction project was affected due to certain litigation before Bombay High Court is untenable.
15. It is also intriguing to notice that, on one hand the Appellants claimed that the progress of the project was impacted due to said PILs and other litigations and on the other hand they also claimed that vide letters dated 21.03.2006, 28.02.2008, 03.07.2008, 05.01.2010 and 04.03.2010, they sought payment of installments from the Respondent. Notwithstanding the fact that the demand for payment of installment by the Appellants is uncorroborated, the claim itself is questionable because, as per their own version, the project was affected due to litigations and thus did not progress. If that is so, there could not have been any need for scheduled payments of installments. The Appellants have also failed to bring on record any notice issued to the Respondent pertaining to the situation claimed by them resulting in delay in construction and thus reviewing or extending the terms of subject contract. Further, the contention that the Appellant No. 1 terminated the Agreement with the Respondent vide letter dated 22.10.2012 for non-payment and asked the Respondent to visit their office for refund of the amounts paid along with interest is entirely untenable as it was the Appellant who failed to progress the construction. In any case further, the Appellants failed to forthwith refund the dues, if the Agreement was in fact terminated. Therefore, the unreasonable and totally unjustified delay on the part of the Appellants in completing the construction is conspicuous and they have not provided any reasonable justification for this delay as well as failure to comply with the terms of the contract. Therefore, Complainants are entitled to fair and reasonable compensation. This Commission in CC 379 of 2013 Sivarama Sarma Jonnalagadda & Anr vs. M/s Maruthi Corporation Ltd decided on 21.09.2021 has held that:
"We are of the view that that the Complainant cannot be made to wait indefinitely for the delivery of possession and the act of the Opposite Party in relying on force majeure clause while retaining the amounts deposited by the Complainant, is not on only an act of deficiency of service but also amounts to unfair trade practice."
16. It is clear that there was significant delay in handing over possession of the flat. The complainant cannot be expected to wait indefinitely, as she has already paid a substantial amount with the expectation of timely possession. In several cases, the Hon'ble Supreme Court has asserted the right of buyers to receive fair delay compensation when developers unduly and unreasonably delay possession as per the Agreement. Hon'ble Supreme Court in Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra, II (2019) CPJ 29 SC, decided on 25.03.2019 has observed that:
".....It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession. By 2016, nearly seven years had elapsed from the date of the agreement. Even according to the developer, the completion certificate was received on 29 March 2016. This was nearly seven years after the extended date for the handing over of possession prescribed by the agreement. A buyer can be expected to wait for possession for a reasonable period. A period of seven years is beyond what is reasonable. Hence, it would have been manifestly unfair to non-suit the buyer merely on the basis of the first prayer in the reliefs sought before the SCDRC. There was in any event a prayer for refund. In the circumstances, we are of the view that the orders passed by SCDRC and by the NCDRC for refund of moneys were justified."
17. In another landmark judgement, the Hon'ble Supreme Court in Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghvan, ll (2019) CPJ 34 (SC), decided on 02.04.2019 has held that:
We see no illegality in the Impugned Order dated 23.10.2018 passed by the National Commission. The Appellant - Builder failed to fulfil his contractual obligation of obtaining the Occupancy Certificate and offering possession of the flat to the Respondent - Purchaser within the time stipulated in the Agreement, or within a reasonable time thereafter. The Respondent - Flat Purchaser could not be compelled to take possession of the flat, even though it was offered almost 2 years after the grace period under the Agreement expired. During this period, the Respondent - Flat Purchaser had to service a loan that he had obtained for purchasing the flat, by paying Interest @10% to the Bank. In the meanwhile, the Respondent - Flat Purchaser also located an alternate property in Gurugram. In these circumstances, the Respondent - Flat Purchaser was entitled to be granted the relief prayed for i.e. refund of the entire amount deposited by him with Interest".
18. As regards refund, the Hon'ble Supreme Court in Experion Developers Pvt. Ltd. Vs. Sushma Ashok Shiroor, in Civil Appeal No.6044 of 2019 decided on 7.4.2022 has held that:-
"We are of the opinion that for the interest payable on the amount deposited to be restitutionary and also compensatory, interest has to be paid from the date of the deposit of the amounts. The Commission in the Order impugned has granted interest from the date of last deposit. We find that this does not amount to restitution. Following the decision in DLF Homes Panchkula Pvt. Ltd. Vs. DS Dhanda and in modification of the direction issued by the Commission, we direct that the interest on the refund shall be payable from the dates of deposit. Therefore, the Appeal filed by purchaser deserves to be partly allowed. The interest shall be payable from the dates of such deposits.
At the same time, we are of the opinion that the interest of 9% granted by the Commission is fair and just and we find no reason to interfere in the appeal filed by the consumer for enhancement of interest."
19. As regards possession, the Hon'ble Supreme Court in Supertech Ltd. Vs. Rajni Goyal (2019) 17 SCC 681 decided on 23.10.2018, has held that :-
"However, the Commission held that since there was a delay in handing over possession of the flat to the Respondent purchaser, the Appellant builder was liable to pay interest to the Respondent purchaser by way of compensation. The scheduled date for handing over possession was 31.10.2013. The Appellant builder had issued the pre-possession letter on 31.10.2015. As per the Respondent purchaser, the Appellant builder did not have the occupancy certificate on that date. The Commission directed the Appellant builder to pay compensation in the form of simple interest @ 8% p.a. from 1.11.2013 till the date on which possession was actually offered to the Respondent purchaser.
The Appellant builder inter alia submitted that possession of the flat was offered to the Respondent purchaser in December, 2015 after obtaining the completion certificate for the building. Even though the agreement provided for delivery of possession by 31.10.2013, the delay occurred because of various legal impediments in timely completion of the project because of various orders passed by the National Green Tribunal. The delay ought to be computed from six months after 31.10.2013 i.e. from 1.5.2014 by taking into consideration, the 6 months grace period provided in the agreement. Furthermore, the period of interest should close on April, 2016 when the full occupancy certificate was obtained as per the admission of the Respondent purchaser herself in para 4 (j) of the Consumer Complaint, wherein she has admitted that the Appellant builder had obtained the completion certificate as late as April, 2016 with respect to delay in handing over possession. The Respondent purchaser ought not to be allowed to reap the benefits of her own delay in taking possession. In the light of the aforesaid discussion, the period of compensation of interest must be computed from 1.5.2014 till 30.4.2016 at the rate awarded by the Commission. The Order of the Commission is modified only to the extent mentioned hereinabove. The Appeals are disposed of accordingly."
20. In view of the foregoing, the deficiency in the service of the Appellants in their contractual obligations with the Respondent is established in both the Appeals No.161 and 164 of 2019. Therefore, we dispose of the aforesaid Appeals with modification in the order dated 29.10.2018 passed by the learned State Commission in C.C. No.101 and 102 of 2013 as under: -
ORDER FA/ 161/ 2019 The Appellants/ Opposite Parties are jointly and severally directed to handover possession of flat bearing no. 1003 on 10th floor, B-2 Wing, building known as Divyam Heights to be constructed at Shreenath Nagar, Gilbert Hill Road, Andheri (West), Mumbai 400 058, admeasuring 660 Sq Ft carpet area to the Complainant, within a period of three months.
The amount of Rs. 20,67,974 deposited by the Complainant in the State Commission, along with the interest accrued thereon be paid the Appellants/ OPs within one month after the Appellants handing over the flat to the Respondent.
The Appellants/OPs are jointly and severally directed to pay simple interest @ 8% per annum on Rs.7,26,585 from the date of deposit till the date of handing over the possession of the unit to the Respondent.
The Appellants/OPs are jointly and severally directed to pay Rs.25000 as costs of litigation to the Respondent.FA 164/ 2016
The Appellants/ Opposite Parties are jointly and severally directed to handover possession of flat bearing no. 1004 on 10th floor, B-2 Wing, building known as Divyam Heights to be constructed at Shreenath Nagar, Gilbert Hill Road, Andheri (West), Mumbai 400 058, admeasuring 425 Sq Ft carpet area to the Complainant, within a period of three months.
The amount of Rs.13,35,566/- deposited by the Complainant in the State Commission, along with the interest accrued thereon be paid the Appellants/ OPs within one month after the Appellants handing over the flat to the Respondent.
The Appellants/OPs are jointly and severally directed to pay simple interest @ 8% per annum on Rs.4,69,254/- from the date of deposit till the date of handing over the possession of the unit to the Respondent.
The Appellants/OPs are jointly and severally directed to pay Rs.25000 as costs of litigation to the Respondent.
21. All the pending Applications, if any, are disposed of accordingly. The Registry is directed to release the statutory deposit amount, if any in favour of the Appellants.
...................................... SUBHASH CHANDRA PRESIDING MEMBER ................................................................................... AVM J. RAJENDRA, AVSM VSM (Retd.) MEMBER