State Consumer Disputes Redressal Commission
Arun Awasthi vs M/S B.P.T.P. Ltd. on 22 October, 2024
CC. NO. 1540/2018 D.O.D.: 22.10.2024
MR. ARUN AWASTHI VS. M/S BPTP LTD. AND ANR.
IN THE DELHI STATE CONSUMER DISPUTES
REDRESSAL COMMISSION
Date of Institution: 04.12.2018
Date of Hearing: 30.07.2024
Date of Decision: 22.10.2024
COMPLAINT CASE NO.- 1540/2018
IN THE MATTER OF
MR. ARUN AWASTHI,
S/O MR. KRISHNA PRASAD AWASTHI,
R/O H.NO. L-1/2, GROUND FLOOR,
PARK ELITE FLOOR, SECTOR-84,
BPTP PARKLANDS, FARIDABAD,
HARYANA.
(Through: Mr. Vikran Singh Bais, Advocate)
...Complainant
VERSUS
1. M/S BPTP LIMITED,
THROUGH ITS PRINCIPAL OFFICER/DIRECTOR,
AT: M-11, MIDDLE CIRCLE,
CONNAUGHT CIRCUS,
NEW DELHI - 110001.
2. COUNTRY PROMOTERS PVT. LTD.,
AT: M-11, MIDDLE CIRCLE,
CONNAUGHT CIRCUS,
NEW DELHI - 110001.
(Through: Mr. Arun Prakash, AR)
...Opposite parties
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CORAM:
HON'BLE JUSTICE SANGITA DHINGRA SEHGAL (PRESIDENT)
HON'BLE MS. PINKI, MEMBER (JUDICIAL)
Present: None for the Complainant.
Ms. Sangya Negi, counsel for OP alongwith M. Arun
Prakash, AR of OP.
PER: HON'BLE JUSTICE SANGITA DHINGRA SEHGAL
(PRESIDENT)
JUDGMENT
1. The present complaint has been returned by the District Commission vide order 12.11.2018 on the that the District Commission has no pecuniary jurisdiction to adjudicate the present matter. Accordingly, the Complainant filed the present complaint before this commission alleging deficiency of service and delay in handing over of possession by the Opposite Parties and has prayed the following reliefs:
"(a) direct the Opposite Parties to pay the complainant amount of Rs. 10,31,713.00 along with interest @ 18% per annum from the date of claim made with the Opposite Parties with immediate effect,
(b) allow the complaint in favor of the complainant with compensation for mental harassment and cost; and C) pass such other and further orders as this Hon'ble Forum may deem fit and proper in the facts and circumstances of the present case."
2. Brief facts necessary for the adjudication of the present complaint are as that the original owner booked floor No. L1-22-GF for a total sale consideration of Rs. 25,01,000/- in a project called 'Park Elite Floors' of the Opposite Parties, situated at Sector-84, Faridabad, Haryana. Accordingly, a floor buyer agreement dated 07.06.2010 ALLOWED PAGE 2 OF 16 CC. NO. 1540/2018 D.O.D.: 22.10.2024 MR. ARUN AWASTHI VS. M/S BPTP LTD. AND ANR.
was executed between the original owner and the Opposite Parties. Subsequently, the Complainant purchased the said floor from the original owner through an agreement to sell dated 08.03.2011 and duly paid Rs. 21,47,330/- to the original owner. The balance amount of Rs. 3,53,670/- was to be paid to the Opposite Parties, which the Complainant paid after securing a housing loan of Rs. 20,00,000/- from LIC. Since the Complainant purchased the said floor from the original owner on 08.03.2011 after clearing all dues and obtaining permission from the Opposite Parties through an endorsement form dated 30.05.2011, the Complainant acquired all rights under the floor buyer agreement. As per Clause 4.1 of the said agreement, the Opposite Parties were required to hand over possession of the said floor within 24 months from the date of sanction of the building, plus an additional 180 days for applying for and obtaining the occupation certificate from the relevant authority. However, the Opposite Parties failed to hand over possession within the prescribed time.
3. The Complainant was further shocked to receive a letter dated 23.06.2011 from the Opposite Parties, informing that the super built up area had been increased from 1203 sq. ft. to 1379 sq. ft., requiring the Complainant to make payments for the increased area. The Complainant subsequently received an offer of possession letter dated 18.01.2013, demanding a payment of Rs. 5,19,452/-, despite the fact that all dues had already been cleared. The Opposite Party further demanded Rs. 2,06,700/- for stamp duty, stamp paper fees, conveyance deed registration charges, and an additional Rs. 83,000/- to be paid on or before 17.02.2013, to execute the conveyance deed within 90 days. The Complainant made the required payment within ALLOWED PAGE 3 OF 16 CC. NO. 1540/2018 D.O.D.: 22.10.2024 MR. ARUN AWASTHI VS. M/S BPTP LTD. AND ANR.
the stipulated time. However, neither the stamp papers were purchased nor was the conveyance deed executed. The Opposite Parties then demanded an additional 1% stamp duty of Rs. 38,000/- over and above the amount already paid. Despite several communications from the Complainant, the Opposite Parties failed to provide any satisfactory response. As the Complainant was in urgent need of the house, he reluctantly paid the additional Rs. 38,000/- and Rs. 1,02,000/- as further stamp duty charges on 16.08.2013. Consequently, the conveyance deed was executed on 21.08.2013, but the Complainant was compelled to sign an indemnity bond, which included an arbitrary clause stating that the Complainant would not raise any claims or disputes against the Opposite Parties. Although the physical possession of the said floor was handed over on 28.08.2013, the floor was not in a habitable condition and was incomplete in several respects, including flooring, electrical work, lavatory fittings, and tiling. Furthermore, the Opposite Parties failed to provide any compensation for the delay in handing over possession as required by the agreement. The Opposite Parties also illegally charged Rs. 50,000/- as club charges, despite the fact that no such club exists to date. Thus, the Complainant approached this Commission, alleging deficiency in service on the part of the Opposite Parties.
4. The Opposite Parties have contested the complaint and raised preliminary objections regarding the maintainability of the case. The counsel for the Opposite Parties submitted that the conveyance deed was executed on 21.08.2013, and possession of the said floor was handed over on 28.08.2013 with due diligence and to the full satisfaction of the Complainant regarding the physical condition of ALLOWED PAGE 4 OF 16 CC. NO. 1540/2018 D.O.D.: 22.10.2024 MR. ARUN AWASTHI VS. M/S BPTP LTD. AND ANR.
the property. Furthermore, the Complainant undertook and indemnified that he had no claims against the Opposite Parties concerning any issues with the property, having consciously and willingly executed the conveyance deed on 21.08.2013. Therefore, the counsel argued, the Complainant ceased to be a consumer under the Consumer Protection Act, 1986.
5. The counsel further submitted that maintenance issues are governed by a maintenance and service agreement, and any disputes arising from such matters must be resolved through arbitration. He further submitted that the present complaint is barred by territorial jurisdiction, as the subject matter of the dispute is situated in Faridabad, and thus the courts in Faridabad have jurisdiction to adjudicate the matter.
6. The counsel for the Opposite Parties submitted that the Complainant failed to disclose any cause of action against them. He also submitted that the complaint is barred by estoppel and acquiescence, as the Complainant, having taken possession of the said floor in 2013, cannot raise disputes at this belated stage, especially when the terms of the agreement dated 07.06.2010 are clear. Pressing the aforesaid objections, the counsel appearing on behalf of the Opposite Parties prayed that the present complaint be dismissed.
7. The Complainant has filed the Rejoinder rebutting the written statement filed by the Opposite Party. Both the parties have filed their Evidence by way of Affidavit in order to prove their averments on record.
8. Written Arguments of the both parties also on the record.
9. We have perused the material available on record and heard the counsel for the parties.
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10. The first question for consideration is whether Complainant fall in the category of 'consumer' under the consumer protection act, 1986?
11. The Opposite Parties have contended that as the possession of unit in question has been taken by the Complainant, therefore, he ceases to be a consumer. To resolve this issue, we deem it appropriate to refer to Arifur Rahman and Aleya Sultana and Ors. V. DLF Southern Homes Pvt. Ltd. reported in 2020 (3) RCR (Civil) 544, wherein it is held as under:
"34. The developer has not disputed these communications. Though these are four communications issued by the developer, the Appellants submitted that they are not isolated aberrations but fit into a pattern. The developer does not state that it was willing to offer the flat purchasers possession of their flats and the right to execute conveyance of the flats while reserving their claim for compensation for delay. On the contrary, the tenor of the communications indicates that while executing the Deeds of Conveyance, the flat buyers were informed that no form of protest or reservation would be acceptable. The flat buyers were essentially presented with an unfair choice of either retaining their right to pursue their claims (in which event they would not get possession or title in the meantime) or to forsake the claims in order to perfect their title to the flats for which they had paid valuable consideration. In this backdrop, the simple question which we need to address is whether a flat buyer who seeks to espouse a claim against the developer for delayed possession can as a consequence of doing so be compelled to defer the right to obtain a conveyance to perfect their title. It would, in our view, be manifestly unreasonable to expect that in order to pursue a claim for compensation for delayed handing over of possession, the purchaser must indefinitely defer obtaining a conveyance of the premises ALLOWED PAGE 6 OF 16 CC. NO. 1540/2018 D.O.D.: 22.10.2024 MR. ARUN AWASTHI VS. M/S BPTP LTD. AND ANR.
purchased or, if they seek to obtain a Deed of Conveyance to forsake the right to claim compensation. This basically is a position which the NCDRC has espoused. We cannot countenance that view.
35. The flat purchasers invested hard earned money. It is only reasonable to presume that the next logical step is for the purchaser to perfect the title to the premises which have been allotted under the terms of the ABA. But the submission of the developer is that the purchaser forsakes the remedy before the consumer forum by seeking a Deed of Conveyance. To accept such a construction would lead to an absurd consequence of requiring the purchaser either to abandon a just claim as a condition for obtaining the conveyance or to indefinitely delay the execution of the Deed of Conveyance pending protracted consumer litigation.
36. It has been urged by the learned Counsel of the developer that consequence of the execution of the Deed of Conveyance in the present case is that the same ceases to be a transaction in the nature of "supply of services"
covered under the CP Act 1986 and becomes a mere sale of immovable property which is not amenable to the jurisdiction of Consumer Fora. In Narne Construction (P) Ltd. v. Union of India MANU/SC/0429/2012: (2012) 5 SCC 359, this Court distinguished between a simple transfer of a piece of immovable property and housing construction or building activity carried out by a private or statutory body falling in the category of 'service' within the meaning of Section 2(1) (o) of the CP Act 1986. This Court held that:
8. Having regard to the nature of transaction between the Appellant Company and its customers involved much more than a simple transfer of a piece of immovable property it is Act. It was not the case that the Appellant Company was selling the given property with all its advantages and/or ALLOWED PAGE 7 OF 16 CC. NO. 1540/2018 D.O.D.: 22.10.2024 MR. ARUN AWASTHI VS. M/S BPTP LTD. AND ANR.
disadvantages on "as is where is" basis, as was the position in UT Chandigarh Admn. v. Amarjeet Singh. It is a case where a clear-cut assurance was made to the purchasers as to the nature and extent of development that would be carried out by the Appellant Company as a part of package under which a sale of fully developed plots with assured facilities was made in favour of the purchasers for valuable consideration. To the extent the transfer of site with developments in the manner and to the extent indicated earlier was a part of the transaction, the Appellant Company has indeed undertaken to provide a service. Any deficiency or defect in such service would make it accountable before the competent Consumer Forum at the instance of consumers like the Respondents.
The developer in the present case has undertaken to provide a service in the nature of developing residential flats with certain amenities and remains amenable to the jurisdiction of the Consumer Fora. Consequently, we are unable to subscribe to the view of the NCDRC that flat purchasers who obtained possession or executed Deeds of Conveyance have lost their right to make a claim for compensation for the delaved handing over of the flats. "
12. The above dicta reflects that the Complainant has the right to claim compensation for the delay in handing over the possession of the said floor, which can be pursued after obtaining possession of the property or executing conveyance deeds. Furthermore, the Supreme Court has highlighted the unfair choice faced by flat buyers, where they were forced to either give up their claims to obtain possession and title or retain their claims and forgo possession. Therefore, the contention of Opposite Parties that the Complainant cease to be consumer after taking possession of the floor holds no merit and is dismissed.
13. The next issue to be adjudicated is whether the Complainant has cause of action to approach this commission. It is imperative to refer to Section 24A of the Consumer Protection Act, 1986 wherein it is provided as under:-
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"24A. Limitation period.-
(1) The District Forum, the State Commission or the National Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen.
(2) Notwithstanding anything contained in sub-section (1), a complaint may be entertained after the period specified in sub-section (1), if the Complainant satisfies the District Forum, the State Commission or the National Commission, as the case may be, that he had sufficient cause for not filing the complaint as this such period:
Provided that no such complaint shall be entertained unless the National Commission, the State Commission or the District Forum, as the case may be, records its reasons for condoning such delay."
14. An analysis of Section 24A of the Consumer Protection Act, 1986 leads us to conclude that this Commission is empowered to admit a complaint if it is filed within a period of two years from the date on which the cause of action arises.
15. Returning to the facts of the present case, it is evident that the cause of action last arose when possession was handed over to the Complainant on 21.08.2013, and the conveyance deed was executed between the parties on 28.08.2013. Accordingly, the complaint was filed in 2014 before the District Commission, i.e., within two years from the date of the cause of action. Therefore, the Complainant was within their right to approach this Commission.
16. The next question for consideration is whether this commission has the territorial jurisdiction to decide the present complaint?
17. The counsel for the Opposite Parties submitted that this commission has no territorial jurisdiction to decide the present complaint as the property in question is situated at Faridabad, Haryana.
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18. The jurisdiction of consumer commissions to entertain cases of this nature has been settled via array of judgments. We tend to rely on the dicta of Hon'ble Supreme Court in Narne Construction P. Ltd., etc. v. Union Of India and Ors. Etc., reported at AIR 2012 SC 2369, wherein it was held that "when a person applies for the allotment of a building or site or for a flat constructed by the Development Authority and enters into an agreement with the Developer, or the Contractor, the nature of transaction is covered by the expression 'service' of any description. Housing construction or building activity carried on by a private or statutory body constitutes 'service' within the ambit of Section 2(1)(o) of the Act and any deficiency or defect in such service would make it accountable before the competent consumer forum at the instance of consumers".
19. The Hon'ble National Commission in the case of Rohit Srivastava v. Paramount Villas Pvt. Ltd. reported at 2017 SCC OnLine NCDRC 1198, has held as under:
"Having heard learned Counsel for the parties at some length, we are of the opinion that the order cannot be sustained. It is not in dispute that the Registered Office of Opposite Party No. 1 Company is situated in Delhi, i.e., within the territorial jurisdiction of the State Commission at Delhi and therefore, in the light of clear provision contained in Section 17(2)(a), which stipulates that a Complaint can be instituted in a State Commission, within the limits of whose jurisdiction, the Opposite Party actually carries on business. In view of the said provision, we have no hesitation in coming to the conclusion that since the Registered Office of the first Opposite Party is situated in Delhi, the State Commission did have the territorial jurisdiction to entertain the Complaint. In the light of the said provision, in our view, it was open to the Complainant to choose the Forum to file the Complaint, ALLOWED PAGE 10 OF 16 CC. NO. 1540/2018 D.O.D.: 22.10.2024 MR. ARUN AWASTHI VS. M/S BPTP LTD. AND ANR.
which on the second occasion he decided to file before the State Commission at Delhi."
20. Relying on the above settled law, there is no iota of doubt that this commission has the jurisdiction to entertain the cases relating to allotment agreement including delay in handing over possession of the said floor, as compensation for delay in handing possession is sought due to the deficient services of the Opposite Parties and not for any other reason. Moreover, the Opposite Parties has a registered at M-11, Middle Circle, Connaught Circus, New Delhi - 110001, till which, the jurisdiction of this commission extends. Therefore, this commission is fully empowered to adjudicate the present consumer complaint and is not paralyzed due to the want of territorial jurisdiction.
21. Having discussed the preliminary objections raised on behalf of the Opposite Parties, the next issue which arises is whether the Opposite Parties are actually deficient in providing its services to the Complainant. The expression Deficiency of Service has been dealt with by the Hon'ble Apex Court in Arifur Rahman Khan and Ors. vs. DLF Southern Homes Pvt. Ltd. and Ors. reported at 2020 (3) RCR (Civil) 544, wherein it has been discussed as follows:
"23. .......The expression deficiency of services is defined in Section 2 (1) (g) of the CP Act 1986 as:
(g) "deficiency" means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.
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 ALLOWED PAGE 11 OF 16 CC. NO. 1540/2018 D.O.D.: 22.10.2024 MR. ARUN AWASTHI VS. M/S BPTP LTD. AND ANR.
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 fulfilment of a contractual obligation."
22. At this stage, we deem it appropriate to refer to Clause 41 of the Floor Buyer Agreement dated 07.06.2010. It reflects that the Opposite Parties were bound to hand over possession of the said floor within 24 months from the date of sanction of the building, plus a grace period of 180 days. Moreover, the Opposite Party admitted that the scheduled delivery date for the said floor was 06.12.2012. However, the Opposite Parties offered possession to the Complainant only on 18.01.2013 and handed over possession on 28.08.2013 after executing the conveyance deed on 21.08.2013. Therefore, there is a clear delay of more than 8 months in handing over possession of the said floor. More so, the Opposite Party failed to pay any compensation for the delayed possession. Furthermore, ALLOWED PAGE 12 OF 16 CC. NO. 1540/2018 D.O.D.: 22.10.2024 MR. ARUN AWASTHI VS. M/S BPTP LTD. AND ANR.
no evidence has been provided by the Opposite Parties to show the existence of any force majeure circumstances.
23. The Complainant further alleged that the Opposite Parties illegally increased the super built up area from 1203 sq. ft. to 1379 sq. ft., resulting in an increase in the basic sale price of the said floor. To resolve this issue, we deem it appropriate to refer to the Pawan Gupta vs Experion Developers Pvt. Ltd. reported as I (2021) CPJ 72 (NC), wherein the Hon'ble National Commission has held as under:
"17. The complaints have been filed mainly for two reasons. The first is that the opposite party has demanded extra money for excess area and second is the delay in handing over the possession. In respect of excess area, the complainant has made a point that without any basis the opposite party sent the demand for excess area and the certificate of the architect was sent to the complainant, which is of a later date. The justification given by the opposite party that on the basis of the internal report of the architect the demand was made for excess area is not acceptable because no such report or any other document has been filed by the opposite party to prove the excess area. Once the original plan is approved by the competent authority, the areas of residential unit as well as of the common spaces and common buildings are specified and super area cannot change until there is change in either the area of the flat or in the area of any of the common buildings or the total area of the project (plot area) is changed. The real test for excess area would be that the opposite party should provide a comparison of the areas of the original approved common spaces and the flats with finally approved common spaces/buildings and the flats. This has not been done. In fact, this is a common practice adopted by majority of builders/developers which is ALLOWED PAGE 13 OF 16 CC. NO. 1540/2018 D.O.D.: 22.10.2024 MR. ARUN AWASTHI VS. M/S BPTP LTD. AND ANR.
basically an unfair trade practice. This has become a means to extract extra money from the allottees at the time when allottee cannot leave the project as his substantial amount is locked in the project and he is about to take possession. There is no prevailing system when the competent authority which approves the plan issues some kind of certificate in respect of the extra super area at the final stage. There is no harm in communicating and charging for the extra area at the final stage but for the sake of transparency the opposite party must share the actual reason for increase in the super area based on the comparison of the originally approved buildings and finally approved buildings. Basically the idea is that the allottee must know the change in the finally approved lay-out and areas of common spaces and the originally approved lay-out and areas. In my view, until this is done, the opposite party is not entitled to payment of any excess area. Though the Real Estate Regulation Act (RERA) 2016 has made it compulsory for the builders/developers to indicate the carpet area of the flat, however the problem of super area is not yet fully solved and further reforms are required."
24. On perusal of the above settled law, it is clear that once the original plan is approved by the competent authority, the areas of residential unit as well as of the common spaces and common buildings which were specified at the time of approval cannot be changed until there is a change either in the area of the floor or in the area of any of the common buildings or there is a change in the total area of the project (plot area).
25. Returning to the facts of the present case, we failed to find any document which shows that there was change in either the total area of the unit or in the area of any of the common buildings or any change in the total area of the project. Moreover, the Opposite ALLOWED PAGE 14 OF 16 CC. NO. 1540/2018 D.O.D.: 22.10.2024 MR. ARUN AWASTHI VS. M/S BPTP LTD. AND ANR.
Parties failed to show any comparison/ difference in the areas of the original approved space and the common spaces/buildings which were finally allotted by the Opposite Parties to the buyers. Therefore, we do not see any justification in increasing the super built-up area of the said floor and charging the excess amount for the increased area by the Opposite Parties.
26. Furthermore, after carefully perusal of agreement, it is noted that the other costs related to stamp duty in accordance with the agreed terms, therefore, said demand of the Opposite Parties is justified. The Complainant also alleged that the Opposite Parties also illegally charged Rs. 50,000/- as a club charges but no such club exist till date. However, the complainant failed to place any evidence to substantiate same.
27. Relying on the aforesaid discussion, we hold that the Opposite Parties are deficient in providing its services to the Complainant as the Opposite Parties by illegally and arbitrary charging extra amount for increased super area and cost escalation charges towards the said floor.
28. Keeping in view the facts of the present case and the extensive law discussed above, we direct the Opposite Parties to refund the excess amount charged due to the increase in super build up area from 1203 sq. ft. to 1379 sq. ft., i.e., Rs. 5,24,784/-, along with simple interest at the rate of 6% per annum from the date of the conveyance deed until the actual realization of the amount.
29. In addition to the aforesaid and taking into consideration the facts of the present case, the Opposite Parties are directed to pay a sum of A. Penalty as per clause 4.3 of the Floor Buyer Agreement dated 07.06.2010 from the date 07.12.2012 till 21.08.2013 (Conveyance deed date).
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B. Rs. 1,00,000/- as cost for mental agony and harassment
to the Complainant; and
C. The litigation cost to the extent of Rs. 50,000/-.
30. Applications pending, if any, stands disposed of in terms of the aforesaid judgment.
31. The judgment be uploaded forthwith on the website of the commission for the perusal of the parties.
32. File be consigned to record room along with a copy of this Judgment.
(JUSTICE SANGITA DHINGRA SEHGAL) PRESIDENT (PINKI) MEMBER (JUDICIAL) Pronounced On: 22.10.2024 LR-ZA ALLOWED PAGE 16 OF 16