State Consumer Disputes Redressal Commission
Sandeep Gupta vs Inperial Housing Ventures Pvt Ltd on 4 July, 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/154/2017 ( Date of Filing : 25 Apr 2017 ) 1. Sandeep Gupta S/O Sri Uma Prakash Gupta R/O K.E.85 New Kavi Nagar Ghaziabad U.P. 201002 ...........Complainant(s) Versus 1. Inperial Housing Ventures Pvt Ltd Through its Chairman Cum Managing Director Regd. Office at Room N0. 205 Welcome Plaza S-551 School Block (II) Shakarpur New Delhi 110092 ............Opp.Party(s) BEFORE: HON'BLE MR. Rajendra Singh PRESIDING MEMBER HON'BLE MR. Vikas Saxena JUDICIAL MEMBER PRESENT: Dated : 04 Jul 2022 Final Order / Judgement REERVED State Consumer Disputes Redressal Commission U.P. Lucknow. Complaint no. 154 of 2017 Sandeep Gupta s/o Sri Uma Prakash Gupta, R/o K.E.85, New Kavi Nagar, Ghaziabad, U.P. 201002 ....Complainant. Versus 1- Imperial Housing Ventures Pvt. Ltd., through its Chairman-cum-Managing Director, Regd. Office at Room No.205 Welcome Plaza, S-551,School Block (II), Shakarpur Delhi-110092 2- Harendra Nagar (Director), 11th Floor, Paras Twin Towers (Tower B), Sector-54, Golf Course Road, Gurgaon-122002, Haryana 3- Rajendra Singh (Director), 11th Floor, Paras Twin Towers (Tower B), Sector-54, Golf Course Road, Gurgaon-122002, Haryana 4- New Okhla Industrial Development Authority, Main Administrative Office, Sector-6, Noida (U.P.) through its Chairman. .... Opposite parties. Present:- 1- Hon'ble Mr. Rajendra Singh, Presiding Member. 2- Hon'ble Mr. Vikas Saxena, Member. Sri Vishnu Kumar Misra, Advocate for the Complainant. Sri Amit Kumar Verma, Advocate for opposite party no.4. None appeared for the OPs no.1 to 3. Date 20.7.2022 JUDGMENT
Per Mr. Rajendra Singh, Member: This complaint has been filed by Sri Sandeep Gupta against the Imperial Housing Ventures Pvt. Ltd. & ors. for the following reliefs.
To pass an order directing the opposite parties for revival of the allotment of flat as mentioned above bearing no.T-26/06 07 in Tower T26 on sixth Floor at "Paras Tiera" Project Sector 137, Expressway, Noida (U.P.) ignoring or after setting aside the purported backdated cancellation letters dated 12.10.2015 and 21.10.2015.
To pass an order directing the opposite parties to provide NOC's handover papers, occupancy certificate, functional certificate in respect of lift, fire, pools and other common facilities and to provide a prior actual & physical verification of the unit to ascertain that quality & quantity of the material used as agreed in terms of agreement mentioned herein above along with all facilities & necessities are meted as agreed & required for living in the premises unit no.T-26/06 07 in Tower T26 on sixth floor at "Paras Tiera" Project Sector 137, Expressway, Noida (U.P.).
To award compensation to the tune of Rs.10,00,000.00 in favour of the complainant and against the opposite party nos. 1 to 3 towards harassment and mental agony suffered by the complainant due to unethical, unfair trade practices, improper and malpractices adopted by the opposite parties.
To award the cost of the proceedings in favour of the complainant and against the opposite parties nos. 1 to 3 to the tune of Rs.2,00,000.00 and May pass such other further orders or consequential relief which this Hon'ble Commission deems fit and proper in the interest of justice.
The brief facts of the complaint case are that, that the company Imperial Housing Private Limited is of Paras Group which made lots of promises and assurances e.g. Paras Tierra in Sector 137, Expressway Noida, U.P. township would be a mega township, spread over approximately twenty acres of land, it would be intended for the elite residents and would be full of all the amenities. The complainant relying on these false promises and assurance and in order to fulfill a dream to have a home for himself and his family, has applied for a flat of total super built up area of 1660 sq. ft. at the agreed and all inclusive rate of Rs.3400.00 per sq. ft. under a construction linked plan 25% at the time of allotment rest 75% at the time of physical possession with all amenities and specification as agreed upon and mentioned in allotment letter issued in furtherance of application dated 30th October, 2010 and had also paid Rs.14,45,730.00 towards the application/allotment money which was duly acknowledged by opposite parties company vide acknowledgement receipt Sl.no.BR/10-11/Nov/03/024 dated 3rd November, 2010 for Rs.5,56,000.00, BR/10-11/Feb/10/024 dated 10th February, 2011 2010 for Rs.2,30,000.00, BR/10-11/Feb/10/025 dated 10th February, 2011 for Rs.3,16,000.00, BR/10-11/Feb/22/053 dated 22nd February, 2011 for Rs.3,00,000.00 rest service tax.
In pursuant to aforesaid application/allotment money having been paid by the complainant, opposite parties had issued a PAL (provisional allotment letter) dated 7th December 2010. Later on receiving complete 25% payment by complainant opposite parties issued an executed the 'Terms and Condition of the Allotment letter' on 18th March, 2011. As such the total consideration (including other charges also) as agreed between complainant and opposite parties for the aforesaid allotment was worked out to be Rs.56,44,000.00. Opposite parties were strictly bound by the terms and conditions of the allotment letter where in opposite parties assured complainant to hand over the physical peaceful possession of the property within time specified i.e. thirty six months (including grace period of 12 months) and my client was required to make payment as per the payment plan enclosed the above terms and conditions of the allotment letter.
The opposite parties must be aware that the complainant has visited opposite parties office and at site as well at Haryana several times, but no one there, seemed to be willing to discuss and console and satisfy him about the actual possession of the flat. The complainant was shocked to know that opposite parties don't even have certain clearance including environmental clearances required as per norms specified in various acts and notification issued by U.P. Government and nothing complied in accorded with the law. Opposite parties in most dishonest and illegal manner have extracted huge money from complainant while such launce are absolutely illegal and prohibited by the Government. The design which was shown to complainant at the time of offering for sale and the design adopted in the actual construction was entirely different. The opposite parties had failed to even commence the construction on time, complainant after waiting for considerable period of time i.e. for more than 6 months and seeing no progress in the project, approached opposite parties on several occasions and the employee of the opposite parties had assured to complete construction with all specifications and amenities as assured in the terms and conditions of the allotment letter and the time stipulated in i.e. twenty four months and all the time their staff also reiterated the terms of delay possession penalty, in fact complainant was only looking for time bound delivery of flat for his own residence since his family was staying in a rented accommodation or otherwise this delayed penalty cannot compensate complainant in any manner what so ever.
The opposite parties have illegally and wrongfully collected the huge amount of money from several persons including complainant, in the name of raising construction of project but the records of different Government Office show they don't have any kind of statutory clearances like environment/pollution/water/file/disaster authority and have also faulted the mandatory guidelines causing wrongful gain to themselves and wrongful loss to complainant. Hence as such, opposite parties have committed a fraud, forgery cheating and criminal breach to trust etc. against complainant.
After accepting substantial amount of the total consideration of the proposed flat in Tower 26 unit 0607 Sector 137, Expressway Noida, U.P. opposite parties have further raised a demand vide letter dated 30th May, 2015 for rest of the balance payment which complainant was supposed to pay at the time of possession as per the allotment agreement dated 18/03/2011. The demand made vide letter dated 30th May, 2015 is in contravention of agreement dated 18th March, 2011. Demand is made in piece meal only for selected floors. It will not be out of place to mention here that despite several request made by complainant to opposite parties but they are neither showing the construction of allotted unit as stated by opposite parties nor showing the occupancy certificate the legal document which is since qua none to ascertain the completion and legality of the construction. The complainant has all right and opposite parties duty to prove the copy of entire licenses, certificates and compliances obtained by them till the completion of project which opposite parties are avoiding an diluting the issue over full and final payment, after waiting sufficiently, complainant was constrained to seriously pursue the case of possession as promised with the officers of opposite parties but ultimately they have shown their inability to show the allotted property on the false and frivolous ground of complete payment even they have denied for physical inspection of same as well which is quite illegal and arbitrary.
The opposite parties at the sole instruction and in connivances with other opposite parties constantly causing havoc to complainant and his family. They have denied the physical inspection of their own flat without making the 100% payment that is too enhanced by a substantial amount without any justified and logical reason but opposite parties including their so called bouncers "Anti Social Elements" along with the security guards employed at the site man handled complainant who thoroughly is an absolute gentlemen at the sole score of denying the physical verification opposite parties are liable to criminal prosecution. Action of employees of opposite parties has raised sound suspicion about the quality and quantity of material used in the construction and about the physical condition of flat unit Tower 26/0607. It is evidence that opposite parties have already, as on date, delayed the physical possession of more than thirty one months for which in accordance to term item 5(e) of Terms and conditions of Allotment Letter builder is liable to pay penalty on account delayed possession. Demand dated 30.5.2015 goes to show that total price has been illegally enhanced and no delay payment penalty given to the complainant but contrary to that interest has been imposed upon the complainant.
It is further submitted that the opposite parties have taken a land on lease from Noida Authority but have not complied with the rules and regulation specified but acted in contravention to the U.P. Apartment Act and delayed the construction beyond the assured period which thus evident that they have diverted the public money collected from the innocent aspirants of the flat in different projects across the country for the project for which they have nothing to do. IN this unfair exercise, the complainant above named have also been trapped inasmuch as even after initial payment and shown his readiness to make the balance on time but opposite parties have not handed over the unit as stated above. Thus, it is clear that the opposite parties have not only misappropriated the amount of complainant but also played a fraud with them in a very calculative manner. From the facts and circumstances of the case, it is clear that opposite parties are also involved in unfair trade practices.
The conduct and action of the opposite parties have completely shaken the trust of complainant reposed in them and considering the soaring prices of the real estate in Delhi/NCR, complainant apprehend that action of opposite parties will leave complainant deprived of this home forever and a large part of his savings are invested with opposite parties without any return to him and on which opposite parties are enjoying a great returns and their employees keeping bad-eye upon the flat of complainant as such their employees through various brokers have approached the complainant to sell out his flat on the rates comparatively very cheap from the secondary market which shows their ulterior motive and ill intentions.
The complainant has also come-across with the information that without obtaining requisite license from the Government of U.P. opposite parties started collecting money from the innocent persons under the garb of pre-launched booking. Even without obtaining the license from the Government of U.P. opposite parties have raised the construction without taking certain clearances like environment, construction etc. and neither provided the flats to the aspirants including complainant nor allowing them to see and check the development taken place so far. So much so, the funds collected for a particular project has been diverted for a different project. Without furnishing required documents and the visit of flat, opposite parties are sending reminders of demand and are coercing complainant to pay the demand or threatening to levy penal interest charges at 18% per annum. They are also demanding from complainant to pay advance charges for one year on account of maintenance of the flat without execution of the maintenance agreement which is in fact in contravention to item 9 of the Terms and Conditions of the Allotment Letter. The opposite party has delivered the units to other residents without basic facilities like clubhouse etc. for which residents are now crying, copy e-mails and groups chats showing the gross deficiencies at the part of opposite parties.
The complainant is a consumer within the meaning of Section 2(d)(i) of the Consumer Protection Act, 1986 qua the opposite parties no.1 to 3 and aggrieved by the demand letter for complete payment without completion of project issued by the opposite party for covering its own deficient services and unfair trade practice by assuring the customer/consumer for handing over the possession of the flats within two years whereas it was found that after expiry of two years the construction was up to only plinth stage. Physical construction at site was not up to the mark and whenever it was examined at site was far being from the given update it goes to show that fake and fabricated progress reports were shown to the applicant along with other customers. On 20.6.2015 applicant physically examined the site when he was not allowed to enter in the towers on pretext of one and other but applicant somehow manages to take actual site photographs which goes to show site was not ready to handover on 20.6.2015. The complainant being aggrieved from the above said conduct of the opposite parties got issued a legal notice through his counsel vide dated 20.7.2015 against the opposite parties asking all the requisite papers along with physical verification at site and shown his readiness to make the balance payment but through their reply dated 28.8.2015 they in fact admitted their own illegalities not slowing the allottees for physical verification but suggested to obtain permission from CRM Team those are adamant to make 100% payment in advance prior to any kind verification.
The complainant was shocked to know that the opposite party has offered him possession of the flat no.T-26/0607 on 30.5.2015 while on the said date they were not awarded occupancy certificate in respect of the said project. It was quite shocking to know that as per official records NOIDA has not issued occupancy certificate in respect of said entire project but in a most dishonest and illegal manner in connivance with the NOIDA official's who is mother body since the land is lease hold and NOIDA is charging lease rent from the intending buyers hence NOIDA Authority is responsible for supervision but the opposite party somehow managed to get the partial completion certificate which is ab-initio illegal and goes to show the mala-fide and collusion between builder and authority official, partial completion certificate issued illegally to benefit builder and in-spite of repeated request that certificate was not provided to the complainant and document itself goes to show that said was manipulated paper issued without completion of entire property. That property was under development hence it was not developed entirely and can not worded as liveable property hence, that partial completion is against the existing statutory provisions and bad in law.
The complainant was in constant touch with builder officials they were suppose to provide complaint the entire NOC's handover papers, occupancy certificate, functional certificates in respect of lift, fire, pools and other common facilities but the complainant was shocked to know that they have issued cancellation letter in respect of applicants flat which is gross arbitrary because as per plan complainant had paid the advance and was always ready to make the balance payment 75% on final handover hence, the cancellation issued by way of backdating first time shown to complainant on 18.10.2016 is quite illegal and liable to be set aside.
This conduct of the opposite party not only amount to unfair trade practice but also proves unjust enrichment on the expenses of the complainant and has caused wrongful loss to him. For such financial loss also, the complainant deserves adequate pecuniary relief and compensation. The cause of action to file the present complaint firstly arose when the complainant paid the entire amount to the opposite parties no.1 to 3. It further arose on 3.11.2013 when the opposite party was under legal obligation to give the possession of the aforesaid flat to the complainant. It thereafter has arisen on every occasion when the complainant had contacted opposite parties no.1 to 3. It also arose when legal notice dated 20.7.2015 was issued to the opposite party. As such, the cause of action is still continuing and subsisting.
The property in question is situated at Sector 137, Expressway, NOIDA (U.P.). Thus, the cause of action to file the present complaint accrued in favour of complainant and against the opposite party is within the territorial and pecuniary jurisdiction of this Hon'ble Commission. This Hon'ble Commission, therefore, has the jurisdiction to entertain and try the present complaint and grant the relief sought for. Earlier complainant had filed complaint in State Commission at Delhi vide complaint no.1368 of 2016 which has been disposed of by means of order dated 6.12.2016 directing the complainant to file the complaint before this Hon'ble Commission.
The complainant humbly submits that the cause of action and the grievances of the complainant, being continuing in nature, are within the period of limitation as prescribed in Section 24A of the Act. The present complaint is therefore, within the limitation period.
The opposite parties no.1 to 3 has submitted their written statement in which they have stated that the complaint is not maintainable and the claim of the complainant is baseless, whimsical and contrary to the settled principles of law and the answering opposite parties deny each and every allegations is in the complaint unless specifically admitted herein. The complainant is not allottee in the records of the opposite parties. The opposite party no 1 constrained to terminate the allotment of the complainant by following due process under law and under the terms of the agreed terms issued termination/cancellation letter dated 21.10.2015. The new allotment of the said unit was made on 08.11.2016 and agreement executed on 10.11.2016. Later on the said new allottee has further transferred this unit to another person on 01 March 2017. The details of all these transactions are duly maintained in the records. The answering opposite parties rightly forfeited the earnest money of the complainant as the complainant fails to perform his part of the contract. The Hon'ble Privy Council in 1926 has held that the earnest money is part of the purchase price when the transaction goes forward and it is forfeited when the transaction fails through, by reason of the fault or failure of the purchaser. The Hon'ble Supreme Court of India also in Satish Batra Vs. Sudhir Rawal, civil appeal no 7588/2012 also held that the seller was justified in forfeiting the earnest money since the earnest money was primarily a security for the due performance of the agreement and, consequently, the salary is entitled to forfeit the entire deposit. The present complaint of the complainant is not minimal and liable to be dismissed because after termination of contract there exist no relationship between the parties as the consumer and service provider.
The present complaint of the complainant is not minimal and liable to be dismissed as the present complaint is hopelessly time barred in terms of the pleading set out in the body of the complainant under reply as the booking of the question flat was made in 2010. It is submitted that As per Section 24 A of the consumer protection act 1986, the limitation for filing a complaint is clearly mentioned as two years. The complainant is making a barred and blatant attempt in order to scuttle out of his liability in performing his part of obligation as per the agreement. The complainant did not approach this Hon'ble Forum with clean hands and concealed all material facts. The complainant in order to malign the image of the answering respondent/opposite parties, is making false, frivolous and vexatious allegations which are far from the actual facts of the case. The complainant has not been able to point out any deficiency in service of the answering respondents. The answering opposite parties have complied with each and every clause of the agreement entered with the complainant in its entirety. There has been no breach of contract at the end of the answering opposite parties. It is the present complainant who has breached the agreement by not paying money/instalments on time. The booking of the unit of the complainant was cancelled by the respondent as per the terms and conditions agreed upon.
The complainant not only defaulted the nominal booking amount (which in itself was paid in unusual manner) but also not paid the balance amount and there had been frequent delays in payments from his and. In fact, the complainant has distorted the material facts according to his whims and fancies with a malafide intention and ulterior motive to derive maximum benefits for himself at the cost of respondents interests. The complainant was irregular in making good the scheduled instalments and later, compiled by the total indifference on the part of the complainant to pay his dues, the respondents issued the cancellation letter dtd 12.10.2015 and also issued the termination and forfeiture letter dtd 21.10.2015 to the complainant thereby clearly stating to him that in view of his failure to pay his dues in time, the allotment of suit property/flat stood cancelled. The complainant, in spite of making his payments under the agreed terms started imposing false and frivolous allegations against the respondent no.1. As soon as the offer of possession dated 30.05.2015 was issued to the complainant he started writing emails to the officials of the respondent no 1 by way of harassing and threatening to unwanted and unjust demand. The respondent no 1 cooperated in all the best possible manner to accommodate all the clarifications and support he required from him. On providing all the necessary information to the complainant is still he continued to write emails for fulfilment of his unjust demands.
The complainant had booked the said property/flat with the sole intent to resell it to earn profits and to make money out of this deal. He did not intend to be the end user. His interest in purchasing of the said flat was just and profits by the shelling the said flat at high premium, thus providing full payment from his and so as to keep his investment to the minimum from earning/business point of view. As such the property/flat having been booked with the sole intention to profit, it is not covered under the purview of Consumer Protection Act 1986. The complainant, after complete structure, making himself satisfied in all means, approached the respondent no 1 to book the aforesaid unit with a special scheme of 25% - 75% with was not a construction linked plan. In this special scheme 25% has to be paid at the time of booking and rest 75% has to be paid on offer of possession. It is admitted that the complainant paid the booking amount of booking/application money but it is vital and important to state that the complainant had to pay 25% of the time of booking i.e, 30.10.2010 but the complainant wilfully defaulted in making the payment and make the payment in bit and pieces till 22.02.2011 which itself was a breach of the terms agreed i.e, after four months of the booking application form. The complainant did not pay booking amount on time as agreed and lingered in the payment for four months. The respondent no.1 being a customer friendly company and taking care of its customers issued the PAL (provisional allotment letter collected dtd 07.12.2010 without waiting for receipt of entire booking amount which the complainant failed to pay on time. Later on after receiving the complete 25% of payment from the complainant, the respondent no 1 issued and executed the terms and conditions of the allotment letter on 18.03.2011. The respondent no 1 completed its part of the agreed terms as per the 25:75 /C plan by issuing offer of possession vide its letter dtd 50.05.2015. The complainant failed miserably to honour its commitment of payment of the remaining 75% balance sale consideration.
The respondent no.1 employees always attended to the complainant request and queries and try to satisfy him in best possible manner. Respondent no 1 has all the requisite consents, approvals, permissions and possession and authorisations. It is denied that design which was shown to the complainant at the time of offering for sale and the design adopted in the actual construction were different. The respondent no.1 has duly completed its aforesaid project and handed over possession to majority of the occupants. The said cancellation was collected under valued agreements signed with the occupants. It is a ulterior motive of the complainant to malign the image of the respondent no 1 and vilify its name which it had established in the market for its wrongful gain and causing wrongful loss to the respondent no.1. The respondent no.1 was able to deliver the aforesaid project to its occupants. He has come to know of an as alleged by the complainant and on the other hand it is the complainant who have defaulted in the payment of 75% of the total sale consideration after the offer of possession was issued to the complainant. The demand letter dtd 30.05.2015 was issued as per the agreed terms. It is important to mention that the respondent no 1 was issued before this offer of possession and advance intimation about the release of the offer of possession dated 23.01.2015. The respondent no1 completed its obligation but the complainant defaulted to clear the outstanding 75% of the payment as per letter for offer of possession and similarly on earlier occasion also as mentioned in the appellants the complainant has defaulted to pay the timely manner the booking amount. All the details and the copies of the approvals and licenses are public documents and anybody can verify the same by visiting the respondent shall no 1 of his with prior appointment and by visiting the concerned authorities to its inspection. The respondent no.1 have clearly shown the copy of the occupancy certificate as demanded by the complainant and never did the respondent no.1 refrained or stop the complainant of visiting the site.
The construction is being carried out according the applicable standards and guidelines and best construction material has been used. The complainant is trying to defame the respondent no.1 and is filed its good image in the market. No delay possession penalty is required to be paid to the complainant no.1 as the possession is being offered as per the payment plan agreed. The offer of possession letter is proper and valid as other and statutory charges were included about which the complainant was very much aware. The respondent no.1 has delivered the unit and the entire project on time and no undue money has been charged from any of its customers. Since the complainant has committed gross violation/breaches of not making the payment of the balance sale consideration and of not taking the possession of unit on time the respondent no 1 sent various letters and reminder set to clear the same. The complainant did not respond to any of the correspondences and continued as a wilful default. To all these acts and deeds of the complainant, the respondent no.1 was constrained to terminate the allotment of the aforesaid unit vide termination and forfeiture letter dated 21.10.2015 clearly mentioning the reasons for such termination due to non-payment of the balance sale consideration.
The respondent no.1 issued the offer of possession on 30 May 2015 and after that gave due opportunity through calls, correspondences to clear the outstanding payment but of no avail. After five months of the respondent no.1 were constrained to terminate the allotment of the unit in proper and valid manner as per the terms of the allotment and delivered the termination and forfeiture letter to the complainant. The respondent no 1 have suffered losses on the aforesaid unit by receiving only the booking amount and the spending rest from its own pocket and was ready with the possession in lieu of payment of the rest of the major chunk of sale consideration by the complainant which he miserably failed to pay. Due to the default of the complainant the respondent 1 suffered an inventory loss and was constrained to sell it further to another party. It is clearly agreed between the complainant and the respondent number one that respondent no 1 shall be free to sell the unit further if he defaults in payment and the earnest money/booking amount shall be forfeited. Due to such facts and circumstances and without any deviation the respondent no.1 allotted the said unit to another allottee as mentioned above. The new allotment of the said unit was made on 8 November 2016 and agreement was executed on 10 November 2016. Later the said new allottee has further transferred this unit to one another person on 1 March 2017.
Levy of the advance maintenance charges is as per the agreed terms and two copies of the maintenance agreement was provided to the complainant with the letter of offer of possession dated 30 May 2015 which the complainant failed to execute. The respondent no 1 has offered possession on timely basis and the complainant has inspected the property and was not denied inspection. The respondent is having proper and genuine occupancy certificate for the tower in which complainant unit is located. The said document was procured from the Noida authority through proper process and procedure and a copy of the same was duly shown to the complainant. The aforesaid project is developed properly and completed on time and many occupants peacefully and happily living in their respective units. Therefore it is most respectfully prayed that the complainant of the complainant may kindly be dismissed with heavy costs.
Opposite party no.4 has also filed his written statement and stated that as per records of the NOIDA, a group housing plot no GH-01, sector 137 was allotted in favour of M/S Imperial Housing Ventures Private Limited, opposite party no.1, and it's a consortium companies on 14.01.2010 in accordance with law and as per policy of the NOIDA. The lease deed of the allotted land was executed on 26 March 2010 between the answering opposite party no.4 and the opposite party no 1 in accordance with the terms and conditions regarding construction, in the lease deed, seven years period was determined for construction of flats on the plot, in accordance with the sanctioned map from the execution of the lease deed dated 26.03.2010. After construction of the flats and completing the required formalities a no dues certificate in respect of the payment of the due amount has to be obtained by the builder in accordance with law from the Group Housing Accounts Department, NOIDA. The builder has to apply for the occupancy certificate in the Housing Department of the authority. After obtaining the occupancy certificate the builder has to obtain permission for execution of Tripartite Sub Lease Deed in accordance with law and policy of the NOIDA after sending the list of allottee of said tower along with no dues certificate and Occupancy Certificate in the Group Housing Department, NOIDA. After offering the said permission and completing other required formalities the Tripartite Sub Lease Deed is executed.
The builder had applied for execution of the Tripartite Sub Lease Deed of the flat in question no T-26/607/gh-01/137 on 09.01.2015 in Group Housing Department, NOIDA. The permission for execution of Tripartite Sub Lease Deed of the flat in question was issued on 09.01.2015 . It is pertinent to point out that the builder has submitted a list of 168 flats in tower 26, in which the name of the complainant Sri Sandeep Gupta was also mentioned. As per the records available in the concerned file of NOIDA the photocopies of Environmental No Objection Certificate and Pollution Certificate are annexed. As per the records available in the concerned file of NOIDA the photocopies of Environmental No Objection Certificate, Pollution Certificate, no Objection Certificate of the Fire Department and Receipts of water charges are annexed. It is submitted that the occupancy certificate was issued in accordance with law executed lease deed as per policy of NOIDA. As such there is no illegality or infirmity in it. In view of the aforesaid facts and circumstances the complainant is totally misconceived and divide of any merit against the answering opposite party No.4 and it is liable to be dismissed with cost.
We have heard the learned counsel for the complainant Mr. Vishnu Kumar Mishra, learned counsel for the opposite party no.4 Mr. Amit Kumar Verma. Counsel of the opposite parties no.1 to 3 did not turn up. We have perused the pleadings, evidence and documents on record.
There is a receipt of 20 June 2013 for an amount of Rs.3,473,000/-, paid by cheque no.424625 drawn on HDFC bank Ghaziabad dated 14 June 2013. In the document terms and conditions of allotment letter it has been stated that an application has been moved by the complainant on 30.10.2010 for the allotment of apartment. The provisional allotment letter has been issued on 07.12.2010 regarding allotment of the apartment bearing number T26/06 07 in tower T 26, type F, unit type 3 BHK simplex ad measuring 1660 square ft . The consideration has been mentioned in a scheduled-1 and payment plan has been described in schedule-II annexed with the allotment letter. We have seen schedule-I. In the schedule the time limit of delivery of possession is given 24 months of will grace period of 12 months. The total estimated cost is Rs.5,644,000/- including basic sale price Rs.5,395,000/- inclusive of Preferential Location Charges, PLC (landscape facing), electric sub station charges, power backup charges, parking charges, club membership charges and other charges if any. In addition to the charges, the complainant has to pay lease rent Rs.166,000/- and IFMSD charges Rs.83,000/-. Therefore the total amount payable is Rs.5,644,000/-. The super area has been mentioned as 1660 square ft approx. In schedule -II, the payment plan and payment made has been given. According to it at the time of application for booking and amount of Rs.14,11,000/-(25% BSP+ 25% lease rent+ 25% PLC+ 25% IFMS). Thereafter at the time of notice of possession, Rs.4,233,000/- was to be paid (75% BSP+ 75% lease rent+ 75% PLC+ 75% IFMS). It is also written that a sum of Rs.14,11,000/- has already been paid to Imperial Housing ventures private Limited as on 18 March 2011. The provisional allotment letter issued on 07.12.2010 and this allotment letter has been executed on 18 March 2011. The possession was to be given in 24 +12 months that is after 36 months from the date of allotment letter which has been exhibited on 18.11.2011 though the provisional allotment letter has already been issued on 07.12.2010. If we take the date of execution of the allotment letter, the opposite parties were bound to give possession by 18.03.2014. The complainant has given a brief account of the money deposited with the opposite parties in para-four of the complainant. The opposite parties no.1 to 3 has admitted in their written statement that the contents of para-four of the complainant is admitted to the extent of price, area, the payment plan and the allotment letter issued. The opposite parties further stated that "it is admitted that the complainant paid the booking amount of booking/application money but it is vital and important to state that the complainant had to pay 25% at the time of booking i.e, 30.10.2010 by the complainant wilfully defaulted in making the payment and made the payment in bit and pieces till 22.02.2011 which itself is the breach of the terms agreed i.e., after four months of his booking application form." Now we again come to schedule-II, the payment plan, in which the opposite parties have categorically stated that a sum of Rs.1,411,000/- has already been paid to Imperial Housing Ventures Private Limited as on 18.03.2011. It is 25% of the total consideration which was to be paid with application for booking. If the opposite parties statement as stated in their written statement is taken to be true, the question arises if the 25% consideration has not been paid at the time of booking why did opposite parties issue provisional allotment letter? It shows that the opposite parties did not take it seriously and once provisional allotment letter has been issued to the appellant it means that the opposite parties were satisfied with the payment at the time of booking. An amount of Rs.14,45,730/- has been paid to the opposite parties from 03.11.2010 to 22.02.2011 as stated in para-four of the complainant and admitted by the opposite parties in their written statement.
Now a further question arises that when an amount of Rs.5,65,000/- and Rs.230,000/- total Rs.7,95,000/- was paid in 2010, why the allotment letter has not been executed in 2010 ? You This money and executed allotment letter on 18 March 2011. You did not add any interest on this early payment or say the payment made before the executing of allotment letter. Why ?
The opposite parties have admitted that they issued offer of possession on 30.05.2015, that is about 14 months of beyond the scheduled time for giving possession. We have seen the written statement but there is no offer of possession letter attached with the restatement of the opposite parties it was duty of the opposite parties to file the copy of the letter of offer of possession showing actual date of issuing, actual date of serving on the complainant and all the attachments are which are sent with the offer of possession letter, but no documents are have been filed by the opposite parties. The opposite party no 4 has stated in his written statement that all the certificates and NOCs are there but no copy has been filed here.
We have seen the email conversations between complainant and opposite parties. The complainant demanded the copy of occupancy certificate but the opposite parties did not send and asked him to visit the office to see it. This occupancy certificate is not a secret document and copy of it should have been provided to the allottees with letter of offer of possession. The conversation also shows that for the whole tower, occupancy certificate has been issued in part meaning thereby that it is dependent on the sweet will of the builders. First we have to see the importance of these certificates.
When buying a home, it is vital to obtain documents, such as the Occupancy Certificate (OC) and Completion Certificate (CC). These are essential documents that allow you to mortgage or sell your home. Hence, homebuyers are advised to take possession of their flat or property only after these documents have been issued.
According to Vikas Bhasin, CMD, Saya Group, "Completion Certificate and Occupancy Certificate are some of the most important documents for a home buyer. Civic authorities can evict the occupants in case of non-availability of the necessary approvals. Before investing in a property, people must be doubly assured that all the certificates and approvals are in place."
Let us dive a little deeper into the details of these documents and their importance before you make a move to buy your dream home.
Owning a home is the culmination of years of savings, research, and paperwork. After patiently waiting for the construction to be complete, you finally register the property and take possession of your flat. But what if your dream home is declared unauthorised, and you are evicted by the authorities? This is not as far-fetched as it sounds. This nightmare could turn into reality without a crucial link in the property sale process - the Occupancy Certificate (OC).
The majority of apartments in different Indian cities have been occupied by owners without any occupancy certificate. This oversight can turn into a costly mistake, jeopardising the legal status of your dream home. The importance of the occupancy certificate cannot be overstated as it seals the legal status of your property and protects your ownership rights.
Decoding legal documents To understand the importance of an occupancy certificate and other legal documents, let's decode the legal jargon and understand their meaning in simple terms. Here's a ready reckoner of the most important legal documents related to your property:
Occupancy Certificate A NOC certifies that the construction of the building has complied with the approved plans. It is issued by local municipal authorities or the building proposal department once the building has been completed and is ready to be occupied. Simply put, without an OC, your building has not been awarded a 'pass certificate'.
Completion Certificate A Completion Certificate (CC) is issued only after the construction meets other building standards like distance from the road, the height of the building, and rainwater harvesting system. A CC alone cannot legalise occupation; the OC is a must.
Commencement Certificate If you are buying an under construction property, make sure you check the Commencement Certificate before signing the agreement. Many builders do not wait for a Commencement Certificate. This is illegal and can create serious problems in obtaining an OC at a subsequent stage.
Why is it unsafe to buy a flat without OC?
In the absence of a valid OC, the local municipal body can initiate serious action against flat owners. In 2014, residents of a well-known building complex in Mumbai's upscale Worli area were hit with a bolt from the blue after their complex was declared unauthorised. At the time of possession, buyers overlooked the issuance of an OC from the builder. It was only after that they were forced to evacuate their flats that the writing on the wall became clear to them.
This is just one instance, and if buyers are not careful about getting the OC, they may face the following repercussions:
• In the absence of a valid OC, your building can be demolished as it can be classified as an unauthorised structure.
• The OC is crucial while applying for a home loan or loan to purchase a resale flat. If you wish to sell or hypothecate the property after a lapse of time, you will not be able to do so without a valid OC.
• The water connection, sanitary connection or electricity supply can be disconnected in the absence of an OC.
How to obtain an OC The OC is obtained from local municipal bodies by submitting an OC application form along with the following documents:
• Commencement Certificate • Completion Certificate • Built and Section plan • NOC for fire and pollution • Area calculation sheet of floor signed by an authorised architect • Photographs of the completed building • Tax assessment with tax paid receipt • Photographs of rain harvesting and solar panels • Copy of the sanctioned plan After submitting the form, authorities inspect the complex and confirm if it has conformed to the approved plan before issuing an OC. Legally and ideally, a builder should submit an application with the municipal commissioner for the OC within 30 days of completion of the property.
How you can apply for an OC As a flat owner, you can also apply for an OC by approaching the local corporation or municipality, and if all approvals are in place, an OC is issued within 30 days of application. You will have to submit the same documents as the builder to procure an OC.
Know your rights If the builder refuses to provide an OC, you should consider exercising your legal rights. You can issue a notice against the builder asking him to apply and hand over the copy of the OC within a month. You can also approach consumer forums and file a writ petition demanding the OC.
Some canny builders simply present the receipt of the OC and dupe gullible customers. But you shouldn't accept anything less than the actual OC as the receipt may be dated.
Landmark legislations like the Real Estate Regulatory Act (RERA) have been passed to regulate the sector, promote transparency and protect consumer rights. However, consumers must be vigilant and understand their rights and responsibilities towards owning a property. Documents like OC are essential and ensure the security of your investment.
Going forward, real estate experts believe that the OC should be made mandatory for the registration of flats and essential services. Until then, buyers must ensure builders get all the necessary approvals before handing over a property.
Difference between Occupancy Certificate and Completion Certificate Occupancy Certificate examines and certifies a property for adherence to bye-laws, civic amenities, electricity, sanitation and other clearances. On the other hand, a Completion Certificate is a document that certifies that a property is fit for possession by the buyers.
Clarifying the difference, Deepak Kapoor, Director, Gulshan Homz, says, "Completion Certificate is just a reaffirmation that the building has been constructed as per the building byelaws and the layout plan has been approved by various concerned authorities. Occupation Certificate signals that there is no violation of building construction norms, and thus, the structure is safe for occupants.
Generally, these documents are not required at the time of registry, and hence, buyers tend to overlook or ignore these. But for their own benefit and peace of mind, it is warranted that buyers of both ready-to-move-in as well as under-construction properties check these documents before taking possession. This would help avoid any unnecessary dispute or confrontation in the future."
Now it has been clear that completion certificate and occupancy certificate are most important certificate and it should be given to the buyers with offer of possession letter. Hon'ble Supreme Court has also held that if there is no occupancy certificate, the offer of possession is not a valid offer of possession in the eye of law. Before going further in this case we have to understand the object of Consumer Petition Act.
The Consumer Protection Act, came into existence and implemented in 1986, provides Consumer Rights to prevent consumers from fraud or specified unfair practices. It safeguards and encourages and gives an opportunity to consumers to speak against insufficiency and flaws in goods and services. If traders, manufacturers and distributors follow any foul trade, this act protects their rights as a consumer.
This Protection Act covers entire goods and services of all sectors that are public, private, or cooperative sectors, except those exempted by the central government. The act provides a floor for a consumer where one can file their complaint against the product and the forum takes an action against the concerned supplier and compensation is granted to the consumer for the inconvenience he/she has encountered. The objectives of the consumer petition act may be summarised as -
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.
What are the rights of consumers ?Let us know more about the rights 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.
Now it is better to discuss some case laws of the Hon'ble Supreme Court and Hon'ble NCDRC which are summarized here as follows:-
In R V Prasannakumaar v. Mantri Castles Pvt Ltd., 2019 SCC On Line SC 224, under the terms of the ABA, possession of the flats was to be handed over to the buyers on 31 January 2014. However, the developer received an occupation certificate only on 10 February 2016 and it was thereafter from May 2016 that the developer started issuing letters offering possession. Based on this, the NCDRC awarded compensation in the form of interest at the rate of 6 per cent per annum. The developer had pleaded that since the agreement provided compensation at the rate of Rs.3 per square foot per month for delayed possession, the purchasers were not entitled to anything in addition. Dealing with the submission, this Court observed:
"9. We are in agreement with the view of the NCDRC that the rate which has been stipulated by the developer, of compensation at the rate of Rs.3 per sq. ft. per month does not provide just or reasonable recompense to a flat buyer who has invested money and has not been handed over possession as on the stipulated date of 31 January 2014. To take a simple illustration, a flat buyer with an agreement of a flat measuring a 1000 sq. ft. would receive, under the agreement, not more than Rs. 3000/- per month. This in a city such as Bangalore does not provide just or adequate compensation. The jurisdiction of the NCDRC to award just compensation under the provisions of the Consumer Protection Act, 1986 cannot in the circumstances be constrained by the terms of the agreement. The agreement in its view is one sided and does not provide sufficient recompense to the flat purchasers."
The Court observed that there was a delay of two years and hence the award of interest at the rate of 6 per cent was reasonable and justified.
In a case where no time limit has been mentioned for the delivery of possession, Hon'ble Supreme Court has said that it should not be limitless and there shall be deemed reasonable period of three years for the delivery of possession.
However the Hon'ble Supreme Court in Civil Appeals NO(S). 3533-3534 of 2017 M/S. FORTUNE INFRASTRUCTURE (NOW KNOWN AS M/S. HICON INFRASTRUCTURE) & ANR. VS TREVOR D'LIMA & ORS. ( Judgement March 12 , 2018 ) has held:
"15. Moreover, a person cannot be made to wait indefinitely for the possession of the flats allotted to them and they are entitled to seek the refund of the amount paid by them, along with compensation. Although we are aware of the fact that when there was no delivery period stipulated in the agreement, a reasonable time has to be taken into consideration. In the facts and circumstances of this case, a time period of 3 years would have been reasonable for completion of the contract i.e., the possession was required to be given by last quarter of 2014. Further there is no dispute as to the fact that until now there is no redevelopment of the property. Hence, in view of the above discussion, which draw us to an irresistible conclusion that there is deficiency of service on the part of the appellants and accordingly the issue is answered. When once this Court comes to the conclusion that, there is deficiency of services, then the question is what compensation the respondents/ complainants is entitled to ?"
In the above-mentioned case Hon'ble Supreme Court also held regarding payment of compensation or quantum of compensation as follows:
"18. This Court in Ghaziabad Development Authority v. Balbir Singh, (2004) 5 SCC 65, has observed that there is no fixed formula for fixing damages in the following manner '8. However, the power 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. As seen above, what is being awarded is compensation i.e. a recompense for the loss or injury. It therefore necessarily has to be based on finding of loss or injury and has to correlate with the amount of loss or injury. Thus, the Forum or the Commission must determine that there has been deficiency in service and/or misfeasance in public office which has resulted in loss or injury. No hard-and-fast rule can be laid down, however, a few examples would be where an allotment is made, price is received/paid but possession is not given within the period set out in the brochure. The Commission/Forum would then need to determine the loss. Loss could be determined on basis of loss of rent which could have been earned if possession was given and the premises let out or if the consumer has had to stay in rented premises then on basis of rent actually paid by him.Along with recompensing the loss the Commission/Forum may also compensate for harassment/injury, both mental and physical. Similarly, compensation can be given if after allotment is made there has been cancellation of scheme without any justifiable cause. That compensation cannot be uniform and can best be illustrated by considering cases where possession is being directed to be delivered and cases where only monies are directed to be returned. In cases where possession is being directed to be delivered the compensation for harassment will necessarily have to be less because in a way that party is being compensated by increase in the value of the property he is getting. But in cases where monies are being simply returned then the party is suffering a loss inasmuch as he had deposited the money in the hope of getting a flat/plot. He is being deprived of that flat/plot. He has been deprived of the benefit of escalation of the price of that flat/plot. Therefore, the compensation in such cases would necessarily have to be higher. ... We clarify that the above are mere examples. They are not exhaustive. The above shows that compensation cannot be the same in all cases irrespective of the type of loss or injury suffered by the consumer." (emphasis supplied) So it is clear that without occupancy certificate, offer of possession is no offer. The copy of either completion certificate or occupancy certificate has not been filed before this court. These copies have also not been sent to the complainant. It was the duty of the opposite parties to send the copy of these certificates and also of all NOCs to the complainant for his satisfaction with has not been done in this case. Once you failed to deliver the possession within three years the grace period, you have become defaulter. The cut of date for delivery opposition in this case is 18.03.2014. There is no evidence showing that any interest are compensation has been paid or has been offered to pay to the complainant by the builders. We have seen the written statement of the opposite parties 1 to 3 . The opposite parties issued termination/cancellation letter on 12.10.2015 to the complainant and a new allotment has been made in favour of third party on 08.11.2016 and immediately thereafter agreement was executed on 10.11.2016 and strangely this new allottee further transferred this unit to one another person on 01.03.2017. It shows that there is something doubtful in this cancellation and for future and also in the allotment to 3rd person who within four months again transferred this unit to some other person. The sale deed has not been provided by the opposite parties why? What was the consideration paid by the third-party to the opposite parties no.1 to 3 and what consideration was paid by the subsequent transferee to the third party is not clear. These are transactions create doubt in the minds of the court and shows the dubious character of the builders.
There is not a single word regarding completion certificate, occupancy certificate, NOC from pollution department, NOC from civil aviation Department and NOC from fire department. Without these, offer of giving possession is no offer in the eye of law.
In the case of Faqir Chand Gulati Vs. Uppal Agencies Pvt. Ltd. & Anr., Civil appeal no.3302 of 2005, judgment dated 10.06.2008, Hon'ble Supreme Court has held that a prayer for completion certificate and C&D Forms cannot be brushed aside by stating that the builder has already applied for the completion certificate or C&D Forms. If it is not issued, the builder owes a duty to make necessary application and obtain it. If it is wrongly withheld, he may have to approach the appropriate court or other forum to secure it. If it is justifiably withheld or refused, necessarily the builder will have to do whatever is required to be done to bring the building in consonance with the sanctioned plan so that the municipal authorities can inspect and issue the completion certificate and also assess the property to tax. If the builder fails to do so, he will be liable to compensate the complainant for all loss/damage.
Hon'ble Supreme Court in the case of Ireo Grace Realtech Private Limited Vs. Abhishek Khanna & Ors., civil appeal no.5785 of 2019, with other civil appeals, judgment 11.01.2021, has held where the development makes an alternate offer of allotment of apartment, the allottees are however not bound to accept the same because of inordinate delay in completing the construction of the towers or units were allotted to them and if the Occupation Certificate is not available even as on date, clearly amounts to deficiency of service.
Now it is clear that the reasonable period for handing over the possession of the flat/plot is three years from the date of allotment order and also if the occupancy certificate has not been obtained, offering delivery of possession is deficiency of service. Also the completion certificate is of utmost importance. In the present case the above mentioned certificates have not been produced before this court. In addition to it there is no NOC of fire department, civil aviation Department and pollution department. Therefore it will be said that the said flat is not ready for the delivery of possession in the absence of these certificates.
In the present case, the total consideration including other charges also as agreed between complainant and opposite parties for the aforesaid allotment, was Rs.5,644,000/-. In this case the opposite parties is also strictly bound by the terms and conditions of the allotment letter where opposite parties assured complainant to hand over the physical peaceful possession of property within time specified that is 36 months including grace period of 12 months but they failed to deliver the possession within the stipulated time. When you have become a defaulter, how can you expect from the complainant to comply all the conditions of the agreement. Without providing the necessary documents to the complainant the opposite parties hurriedly terminate the contract, allotted the questioned unit to some third person who in turn hurriedly allotted/transferred it to another person. So in this case we found the opposite parties 1 to 3 defaulter and there is deficiency of service on their part and further they adopted unfair trade practice by not supplying the relevant documents to the complainant and by transferring the aforesaid unit to some other person who further transferred it to some other person.
Now some case laws of Hon'ble Supreme Court and Hon'ble NCDRC are to be discussed in this light.
In R. V. Prasannakumaar v. Mantri Castles Pvt. Ltd., 2019 SCC on Line SC 224, under the terms of the ABA, possession of the flats was to be handed over to the buyers on 31 January 2014. However, the developer received an occupation certificate only on 10 February 2016 and it was thereafter from May 2016 that the developer started issuing letters offering possession. Based on this, the NCDRC awarded compensation in the form of interest at the rate of 6 per cent per annum. The developer had pleaded that since the agreement provided compensation at the rate of Rs.3 per square foot per month for delayed possession, the purchasers were not entitled to anything in addition. Dealing with the submission, this Court observed:
"9. We are in agreement with the view of the NCDRC that the rate which has been stipulated by the developer, of compensation at the rate of Rs.3 per sq. ft. per month does not provide just or reasonable recompense to a flat buyer who has invested money and has not been handed over possession as on the stipulated date of 31 January 2014. To take a simple illustration, a flat buyer with an agreement of a flat measuring a 1000 sq. ft. would receive, under the agreement, not more than Rs. 3000/- per month. This in a city such as Bangalore does not provide just or adequate compensation. The jurisdiction of the NCDRC to award just compensation under the provisions of the Consumer Protection Act, 1986 cannot in the circumstances be constrained by the terms of the agreement. The agreement in its view is one sided and does not provide sufficient recompense to the flat purchasers."
The Court observed that there was a delay of two years and hence the award of interest at the rate of 6 per cent was reasonable and justified.
In Pioneer Urban Land and Infrastructure Limited v. Govindan Raghavan, (2019) 5 SCC 725, there was a delay of almost two years in obtaining an occupancy certificate after the date stipulated in the ABA. As a consequence, there was a failure to provide possession of the flat to the purchaser within a reasonable period. This Court dwelt on the terms of the ABA under which the builder was entitled to charge interest at 18 per cent per annum for the delay in payment of instalments by the purchaser. On the other hand, the failure to provide possession on the part of the developer was subject to a grace period of twelve months followed by a termination notice of ninety days and a further period of ninety days to the developer to effect a refund. Adverting to these clauses, the court noted:
"6.4. A perusal of the apartment buyer's agreement dated 8-5- 2012 reveals stark incongruities between the remedies available to both the parties. For instance, Clause 6.4(ii) of the agreement entitles the appellant builder to charge interest @18% p.a. on account of any delay in payment of instalments from the respondent flat purchaser. Clause 6.4(iii) of the agreement entitles the appellant builder to cancel the allotment and terminate the agreement, if any instalment remains in arrears for more than 30 days. On the other hand, as per Clause 11.5 of the agreement, if the appellant builder fails to deliver possession of the apartment within the stipulated period, the respondent flat purchaser has to wait for a period of 12 months after the end of the grace period, before serving a termination notice of 90 days on the appellant builder, and even thereafter, the appellant builder gets 90 days to refund only the actual instalment paid by the respondent flat purchaser, after adjusting the taxes paid, interest and penalty on delayed payments. In case of any delay thereafter, the appellant builder is liable to pay interest @9% p.a. only. Another instance is Clause 23.4 of the agreement which entitles the appellant builder to serve a termination notice upon the respondent flat purchaser for breach of any contractual obligation. If the respondent flat purchaser fails to rectify the default within 30 days of the termination notice, then the agreement automatically stands cancelled, and the appellant builder has the right to forfeit the entire amount of earnest money towards liquidated damages. On the other hand, as per Clause 11.5(v) of the agreement, if the respondent flat purchaser fails to exercise his right of termination within the time limit provided in Clause 11.5, then he shall not be entitled to terminate the agreement thereafter, and shall be bound by the provisions of the agreement."
Hon'ble Justice Indu Malhotra speaking for the Court noted:
"6.8. A term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder. The contractual terms of the agreement dated 8-5-2012 are ex facie one-sided, unfair and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2(1)(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the builder." The Court observed that in these circumstances, the flat purchasers could not be compelled to obtain possession which was offered almost two years after the grace period under the agreement had expired. Hence, the NCDRC was held to have correctly awarded interest at the rate of 10 percent per annum.
The decision of this Court in Dhanda Case, 2019 SCC On Line SC 689 has been relied upon by learned Senior Counsel appearing on behalf of the developer as elucidating the principle that where a flat buyers agreement stipulates a consequence for delayed possession, exceptional and strong reasons must be established before the forum constituted under the Act of 1986 awards compensation in addition to what has been contractually agreed. In Dhanda's case, the SCDRC issued a direction for handing over physical possession of the residential unit to the complainant and for execution of a sale deed. In addition, compensation was awarded by way of interest at the rate of 12 per cent per annum with effect from twelve months after the stipulated date under the agreement. In an appeal by the developer, the NCDRC directed that the rate of interest for a house building loan for the corresponding period in a scheduled nationalised bank would be appropriate and if a floating rate of interest was prescribed, the higher rate of interest should be taken for the computation. A sum of Rs.1 lac per annum from the date for handing over possession to the actual date of possession was regarded as appropriate in the facts of the case. In that case under the terms of the buyer's agreements, possession was to be delivered within twenty-four months of the execution of the agreement i.e. 10 February 2013 - failing which the developer was liable to pay compensation at the rate of Rs.10 per square foot per month for the delay. The developer contended that construction activities were delayed as a result of an injunction granted by this Court over a period of eight months and consequently sought an extension of the period for handing over possession by one year. Alternatively, the developer offered to refund the money deposited with interest at 9 per cent per annum. Construction of 258 independent floors was completed while about 1,500 units were nearing completion. In two sets of Civil Appeals which came up before this Court earlier, agreed terms were arrived at providing for the award of interest at 9 per cent per annum from the date of deposit till refund. While considering the order of the NCDRC, this Court observed:
"16. The District Forum under the Consumer Protection Act, 1986 is empowered inter-alia to order the opposite party to pay such amount as may be awarded as compensation to the consumer for any loss or injury suffered by the consumer due to the negligence of the opposite party including to grant punitive damages. But the forums under the Act cannot award interest and/or compensation by applying rule of thumb. The order to grant interest at the maximum of rate of interest charged by nationalised bank for advancing home loan is arbitrary and no nexus with the default committed. The appellant has agreed to deliver constructed flats. For delay in handing over possession, the consumer is entitled to the consequences agreed at the time of executing buyer's agreement. There cannot be multiple heads to grant of damages and interest when the parties have agreed for payment of damages at the rate of Rs. 10/- per sq. ft. per month. Once the parties agreed for a particular consequence of delay in handing over of possession then, there has to be exceptional and strong reasons for the SCDRC/NCDRC to award compensation at more than the agreed rate."
Now the interest may be 6% to 10% in favour of the allottees if they have not been given possession of the flat/plot within promised or within a reasonable time. The complainant has deposited the entire agreed cost of the flat before June 2009. Now it is the duty and obligation of the opposite party to deliver the possession within stipulated time but they failed to do so.
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."
In the case of Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra [Civil Appeal No. 3182 of 2019 @ SLP (C) No(S). 1795 of 2017] judgment delivered on 25.03.2019, the Hon'ble Supreme Court has held:-
"Interestingly, where the buyer is in default, the agreement stipulates that interest at the rate of 18 per cent from the date of default until the date of payment would be charged for a period of two months, failing which the allotment would be cancelled by deducting 5% of the entire value of the property. The agreement was evidently one sided. For a default on the part of the buyer, interest at the rate of 18% was liable to be charged. However, a default on the part of the developer in handing over possession would make him liable to pay interest only at the savings bank rate prescribed by the SBI. There is merit in the submission which has been urged by the buyer that the agreement was one sided.
In the Case of Wg. Cdr. Arifur Rahman Khan and Aleya Sultana and Ors. Versus DLF Southern Homes Pvt. Ltd (now Known as BEGUR OMR Homes Pvt. Ltd.) and Ors. (Civil Appeal No. 6239 of 2019 With Civil Appeal No. 6303 of 2019); The Hon'ble Supreme Court has held:-
"24. A failure of the developer to comply with the contractual obligation to provide the flat to a flat purchaser within a contractually stipulated period amounts to a deficiency. There is a fault, shortcoming or inadequacy in the nature and manner of performance which has been undertaken to be performed in pursuance of the contract in relation to the service. The expression "service" in Section 2 (1) (o) means a service of any description which is made available to potential users including the provision of facilities in connection with (among other things) housing construction. Under Section 14(1)(e), the jurisdiction of the consumer forum extends to directing the opposite party inter alia to remove the deficiency in the service in question. Intrinsic to the jurisdiction which has been conferred to direct the removal of a deficiency in service is the provision of compensation as a measure of restitution to a flat buyer for the delay which has been occasioned by the developer beyond the period within which possession was to be handed over to the purchaser. Flat purchasers suffer agony and harassment, as a result of the default of the developer. Flat purchasers make legitimate assessments in regard to the future course of their lives based on the flat which has been purchased being available for use and occupation. These legitimate expectations are belied when the developer as in the present case is guilty of a delay of years in the fulfillment of a contractual obligation. To uphold the contention of the developer that the flat buyer is constrained by the terms of the agreed rate irrespective of the nature or extent of delay would result in a miscarriage of justice."
"Undoubtedly, as this court held in Dhanda, courts ordinarily would hold parties down to a contractual bargain. Equally the court cannot be oblivious to the one-sided nature of ABAs which are drafted by and to protect the interest of the developer. Parliament consciously designed remedies in the CP Act 1986 to protect consumers. Where, as in the present case, there has been a gross delay in the handing over of possession beyond the contractually stipulated debt, we are clearly of the view that the jurisdiction of the consumer forum to award just and reasonable compensation as an incident of its power to direct the removal of a deficiency in service is not constrained by the terms of a rate which is prescribed in an unfair bargain."
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.
Now it has been very well established that the opposite party completely failed to deliver the possession of the said flat on 18.03.2014 as per their own promise. The possession has also not been delivered in time which is deficiency of services on the part of opposite party and demanding money without providing necessary documents to the complainant is unfair trade practice. They have not filed the copy of the completion/occupancy certificate and NOC from the various departments as said earlier. Keeping in view the judgment of the different Hon'ble higher courts we come to the conclusion that the complainant is entitled to the following reliefs are:-' The opposite parties 1 to 3 are liable to allot the flat as mentioned in the allotment letter bearing o T-26/06 07 in tower T 26 on sixth floor at "Paras Tierra" Project, sector 137, Expressway, NOIDA with all the necessary documents as mentioned above within 30 days from the date of judgment of this complaint case or in alternative may allot and deliver the possession with all the necessary documents a flat of same area in the same project on the choice of the complainant without demanding any further amount whatsoever it may be except the maintenance charge that too after deliver the possession of the flat to the complainant.
We are of the view that the complainants are entitled to get monthly damage according to the area. The area of the said unit is less than 175 m² and keeping in view the judgment of Hon'ble NCDRC in the case of Priyanka Mittal (supra)The complainant is entitled to get Rs.15,000 per month towards rent from March 2010 till July 2013 with interest at a rate of 10% per annum within 60 days from the date of judgment. If the amount is not paid within 60 days from the date of judgment, the rate of interest will be 15% per annum.
The complainant is entitled to get Rs.150,000/- in view of Nalin Bhargava Case (supra) as cost.
The complainant is entitled to get interest on his total deposits at the rate of 10% per annum from respective dates of deposition till the date of actual delivery of possession/executing sale deed with all the relevant documents within 30 days from the date of judgment of this complaint case and if not paid within 60 days, the rate of interest shall be 15% per annum.
In the relief clause of the complaint, the complainant has prayed that may pass is other further orders or consequential relief which this Hon'ble commission deems fit and proper in the interest of justice. So keeping in view all the fraud, unfair trade practice and deficiency in service committed in this case, all the harassment and mental agony given to the complainant we find that the complainants are also entitled to get ₹30 lakhs towards mental harassment, agony sufferings, course of the suit No amount shall be adjusted by the opposite parties to these amounts whatsoever it may be.
The present complaint is decided accordingly.
ORDER The opposite parties no.1 to 3 are directed to allot the flat as mentioned in the allotment letter bearing o T-26/06 07 in tower T 26 on sixth floor at "Paras Tierra" Project, sector 137, Expressway, NOIDA with all the necessary documents as mentioned above within 30 days from the date of judgment of this complaint case or in alternative may allot and deliver the possession with all the necessary documents a flat of same area in the same project on the choice of the complainant without demanding any further amount whatsoever it may be except the maintenance charge that too after deliver the possession of the flat to the complainant.
The opposite parties no.1 to 3 are directed to pay Rs.15,000 per month towards rent from 18.03.2014 till the date of delivery of possession of the flat with interest at a rate of 10% per annum within 30 days from the date of judgment. If the amount is not paid within 30 days from the date of judgment, the rate of interest will be 15% per annum.
The opposite parties no.1 to 3 are directed to pay Rs.150,000/- in view of Nalin Bhargava Case (supra) as cost.
The opposite parties 1 to 3 are directed to pay interest on the total deposits of the complainant at the rate of 10% per annum from 01.03.2010 to 31.07.2013 and it shall be paid within 30 days from the date of this judgment and if not paid within 30 days, the rate of interest shall be 15% per annum.
The opposite parties 1 to 3 are directed to pay Rs.30 lakhs to the complainant towards all the harassment and mental agony, depression, cost of the suit within 30 days from the date of judgment without any interest but If the amount is not paid within 60 days from the date of judgment, the rate of interest will be 15% per annum.
No amount shall be adjusted by the opposite party to these amounts whatsoever it may be.
All the decreetal amount shall be paid within 30 days from the date of judgment of this appeal, otherwise the opposite parties shall pay interest at a rate of 15% per annum on all the decreetal amount. If it is not paid within 30 days 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 Jafri, PA II C-2 [HON'BLE MR. Rajendra Singh] PRESIDING MEMBER [HON'BLE MR. Vikas Saxena] JUDICIAL MEMBER