M. Shreesha ORDER
M. Shreesha, Member
1. This Complaint has been filed under Section 21 (a) (i) of the Consumer Protection Act, 1986 (in short "the Act") against M/s. Orris Infrastructure Pvt. Ltd. (hereinafter referred to as "the Developer"), seeking the following reliefs:
1. "Pay an amount of Rs. 2,11,22,943/- (Rupees Two Crore Eleven lacs twenty two thousand nine hundred forty three only) along with pendente-lite and future interest till the actual realization;
2. Pay an amount of Rs. 10,00,000/- as a compensation towards the mental pain, agony and sufferings;
3. Pay an amount of Rs. 2,00,000/- towards the cost of litigation;
4. Pass such any other or further orders as this Hon'ble Commission may deem fit and proper in the facts and circumstances of the case in favour of the complainant and against the Opposite Party, in the interest of justice."
2. The brief facts as set out in the Complaint are that the Complainant, lured by the rosy representation of the officials of the Developer and the promise of possession within three years from the date of booking, booked an Apartment in the project 'Aster Court Premier' on 14.05.2012 by paying a booking amount of 4,50,000/- by cheque. On 18.05.2012, an Allotment Letter was issued by the Developer, wherein the Complainant was allotted Unit No. 601, 6th Floor, Tower-4B, in the project 'Aster Court Premier' in Sector -85, Gurgaon with a super area of 2410 sq. ft. The Buyer's Agreement was executed between the parties on 04.06.2012. It is stated that the Complainant has paid an amount of 1,15,33,140/-, from May 2012 to December 2016, out of the total sale consideration of 1,21,56,634/-, which construes 95% of the total sale consideration.
3. It is pleaded that despite having paid 95% of the total sale consideration on time, and making several requests, the Developer has failed to deliver the possession to the Complainant till the date of filing of the present Complaint. It is averred that the project is far from completion. It is pleaded that the Developer charges interest @ 18% p.a. from the allottees in case of default in payment of amounts due as can be seen from the demand letter dated 10.12.2016.
4. It is averred that the Developer has arbitrarily changed the date of handing over of possession to within three years from the date of booking to the date of Agreement, which was executed belatedly and he had no other option to execute the Agreement as he had paid a substantial amount of 20,50,000/-. It is pleaded that the Complainant was made to run from pillar to post by the Developer even when he sought information about the progress of the work, but there was no response. The Complainant tried to meet the Directors of the Developer Company but was not allowed to do so. Thereafter, the Complainant sought for refund of the money paid with interest as the Developer failed to deliver the possession within the stipulated time but there was no response. Vexed with the attitude of the Developer, the Complainant approached this Commission seeking the aforenoted reliefs.
5. The Complaint was contested by the Developer on the following grounds:-
Preliminary objections raised by the Developers is that this Commission has no jurisdiction to entertain the instant Complaint as Clause 50 of the Agreement dated 05.06.2012 provides that any dispute between the parties shall be adjudicated under the provision of the Arbitration and Conciliation Act, 1996; that the Complainant is not a Consumer as he books and sells properties for earning profit; that the Developer is not providing any service, thus there is no relationship of service provider and consumer between the Developer and the Complainant; that the relationship between the parties is of a buyer and seller; that the Hon'ble Punjab and Haryana High Court restricted the use of ground water for construction activities and there was acute shortage of water for construction activities which led to delay in the construction of the project; that the Complainant has signed the Agreement out of his free will and volition after fully analysing the terms of the Agreement; that the possession of the Apartment was assured to be offered subject to Force Majeure Conditions and therefore the delay cannot be said to be deficiency of service on their behalf.
6. The Complainant filed their Affidavit by way of Evidence and marked Ex. CW 1 (copy of the Allotment letter dated 18.05.2012), Ex. CW 2 (copy of the Apartment Buyer Agreement), Ex. CW 3 (copy of the demand letter dated 12.12.2016), Ex. CW 4 (copy of the receipt dated 19.12.2016), Ex. CW 5 (copy of the Statement of Account showing the payments) and Mark A (copy of interest calculation sheet) on his behalf.
7. The Developer filed Affidavit by way of Evidence and marked exhibits Ex. OPW 1/1 (copy of the Board Resolution dated 06.01.2018), Ex. OPW 1/2 (copy of the licence of the project dated 24.07.2009), Ex. OPW 1/3 (certified copy of the order dated 16.07.2012), Ex. OPW 1/4 (copy of order dated 31.07.2012), Ex. OPW 1/5 (certified copy of order dated 08.12.2014), Ex. OPW 1/6 (certified copy of order dated 31.01.2015), Ex. OPW 1/7 (copy of arbitration award dated 19.08.2015), Ex. OPW 1/8 (copy of order dated 20.03.2017), Ex. OPW 1/9 (order dated 01.05.2017), Ex. OPW 1/10 (copy of judgement dated 15.03.2017) and Ex. OPW 1/11 (Copy of booking application form) on its behalf.
8. The brief point that falls for consideration in this Complaint whether there was any deficiency of service on behalf of the Opposite Parties and if the Complainant is entitled to the amount prayed for in the Complaint?
9. In brief, it is the Complainant's case that despite paying an amount of 1,15,33,140/- out of the total sale consideration of 1,21,56,634/- for unit No. 601, 6th floor, Tower- 4B for 2410 sq. ft. and having executed the Apartment Buyer Agreement on 04.06.2012, with the promised time for delivery possession being 3 years from the date of Agreement i.e. by 04.06.2015, till date the Opposite Party did not complete the construction nor offered possession, nor paid any amount towards delayed delivery.
10. The first contention of the learned counsel for the Developer that the Complainant is not a 'Consumer' and that he was in the business of buying and selling properties and was an 'Investor' is completely unsustainable in the light of the judgement of this Commission in Kavita Ahuja vs. Shipra Estates MANU/CF/0937/2015 : I (2016) CPJ 31, in which this Commission has laid down the principle that the onus of establishing that the Complainant was dealing in real estate is on the Opposite Parties, which in the instant case they have failed to discharge or file any documentary evidence to prove their case that the Complainant is an 'Investor' and not a 'Consumer'. Therefore we are of the considered view that the Complainants are 'Consumers' as defined under Section 2 (1)(d) of the Act. The stand taken by the Opposite Party that the delay is attributable to Force Majeure and reasons beyond the control of the Developer, and therefore no deficiency of service can be attributed to them is totally untenable as the Opposite Party could not substantiate by means of any supporting evidence that the project was delayed by Force Majeure Events. Except for stating that there was shortage of water, which viewed from any angle, cannot be said to be a "Force Majeure Event", the Opposite Party has not filed any material on record to prove that the reasons were beyond their control.
11. Now we address ourselves to the objections raised by the learned counsel for the Developer that the clause of Arbitration bars this Commission from entertaining the Complaint. The Hon'ble Supreme Court in M/S Emaar MGF Land Limited vs Aftab Singh - MANU/SC/1458/2018 : I (2019) CPJ 5 (SC), has laid down the law that the Arbitration clause in the Agreement does not bar the jurisdiction of the Consumer Fora to entertain the Complaint.
12. At the cost of repetition, as no material has been produced by the Opposite Party to prove that the completion of construction and offer of possession has been delayed on account of reasons beyond THEIR control, there is no justification for the said delay. We find it a fit case to place reliance on the judgment of this Commission in Emmar MGF Land Ltd. & Ors. vs. Amit Puri [MANU/CF/0317/2015 : II (2015) CPJ 568 NC], wherein it was laid down that after the promised date of delivery it is the discretion of the Complainant whether he/she wants to accept the offer of possession, if any, or seek refund of the amounts paid with reasonable interest. In the instant case, the Complainant sought for refund of the principal amounts with interest and compensation as construction is still not complete. We are of the view that the Complainant cannot be made to wait indefinitely for the delivery of possession and the act of the Opposite Party in relying on Force Majeure clause while retaining the amounts deposited by the Complainant, is not only an act of deficiency of service but also of unfair trade practice, especially in light of the view and the fact that the Developer charges interest @ 18% p.a. for any delay in the payments made by the flat purchasers, but at the same time stipulates in Clause 11.5 of the Agreement that in the event that the project is abandoned, refund would be made with only a simple interest of 9% p.a. Additionally, Clause 11.5 further stipulates that compensation would be paid at 5/- per sq. ft. of the super area per month for the period of such delay beyond three years plus six months grace period, which amounts to only 0.117% per month. It is relevant to mention here that the Apartment Buyer Agreement evidences that the basic sale price is 4250/- per sq. ft., whereas the delay period compensation has been stated to be only 5/- per sq. ft. We are of the view that such terms in Clauses are extremely unfair and one-sided and fall within the definition of 'unfair trade practice' as defined under Section 2(r) of the Act. At this juncture, we find it a fit case to place reliance on the recent judgement of the Hon'ble Apex Court in Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, II (2009) CPJ 34 (SC), wherein the Apex Court has observed as follows:
"6.7. A term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder. The contractual terms of the Agreement dated 08.05.2012 are ex-facie one-sided, unfair, and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2 (r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the Builder.
7. In view of the above discussion, we have no hesitation in holding that the terms of the Apartment Buyer's Agreement dated 08.05.2012 were wholly one-sided and unfair to the Respondent - Flat Purchaser. The Appellant - Builder could not seek to bind the Respondent with such one-sided contractual terms."
This judgment squarely applies to the facts and circumstances of this case for all the aforenoted reasons.
13. Learned counsel for the Developer submitted that before the RERA the time given for completion of the Project was 30.06.2020 and that the Project would be completed as on that date. On a pointed query, learned counsel appearing for the Complainant submitted that he is not willing to wait till 30.06.2020 for taking possession as promised date of delivery of possession was way back in the year December 2015, even after taking into consideration the grace period of six months. The Agreement date was 04.06.2012, three years stipulated period as per Agreement ended on 04.06.2015 and the grace period of six months ended on 04.12.2015. Regarding the submission of the Counsel with respect to the fact that the Developer has registered its project with RERA on 13.10.2018, we are of the considered view that this Complaint was instituted much prior to the Registration, and is therefore maintainable specially keeping in view that Section 71 of the RERA does not expressly bar any person from invoking the provisions of the Consumer Protection Act. It has also given a liberty to the person whose Complaint is pending before the Consumer Fora to withdraw it and file before the RERA Authorities.
14. We find it a fit case to place reliance on the judgement of the Hon'ble Supreme Court in Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra, MANU/SC/0429/2019 : II (2019) CPJ 29 (SC), in which the Hon'ble Apex Court has observed as hereunder:
"..........It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession. By 2016, nearly seven years had elapsed from the date of the agreement. Even according to the developer, the completion certificate was received on 29 March 2016. This was nearly seven years after the extended date for the handing over of possession prescribed by the agreement. A buyer can be expected to wait for possession for a reasonable period. A period of seven years is beyond what is reasonable. Hence, it would have been manifestly unfair to non-suit the buyer merely on the basis of the first prayer in the reliefs sought before the SCDRC. There was in any event a prayer for refund.
In the circumstances, we are of the view that the orders passed by the SCDRC and by the NCDRC for refund of moneys were justified."
15. In the instant case also the Complainant cannot be made to wait indefinitely for possession of the unit, as the construction is yet to be completed even after a period of more than 7 years has lapsed from the date of Agreement. Therefore we are of the considered view that the Complainant is entitled for refund of the principal amount with reasonable interest.
16. Now, we address ourselves to the percentage of interest that has to be awarded to meet the ends of justice. Learned counsel for the Developer relied on Clause 11.4 of the Agreement, in which it is stated that the Complainant should elect for seeking refund and only then the refund can be paid. For better understanding of the case Clause 11.4 of the Agreement is reproduced as hereunder:
" 11.4. Failure to deliver possession by company: Remedy to Allottee
If for any reason other than those given in Clauses (11.1) (11.2) (11.3) supra and clause (38), the company shall be unable to or fails to deliver possession of the said Apartment to the Allottee within 36 months plus grace period of 6 months from the date of execution of the Apartment Buyer Agreement by the Company or Sanction of Plans or Commencement of Construction or within any extended period or periods envisaged under this Apartment Buyer Agreement, then in such case, the Allottee shall be entitled to give notice to the Company, within Ninety (90) days from the expiry of said period of three years plus grace period of 6 months or such extended periods, as the case may be, for terminating this Apartment Buyer Agreement. In that case the Company shall be at liberty to sell and/or dispose of the said Apartment and the allotted parking space to any other party at such price and upon such terms and conditions as the Company may deem fit without accounting for the same in respect thereof to the Allottee. Thereafter the Company shall within ninety (90) days form the date of the realization of the sale proceeds after sale of the said Apartment and the Utility Charges, if any, refund to the Allottee, without any interest, the balance from the amounts paid by him/her in respect of the said Apartment and the parking space without deduction of Earnest Money but after deduction of any interest paid, due or payable and any other amount of a non-refundable nature. The Allottee agrees that he/she shall have no other claim against the Company in respect to the said Apartment and parking space, under this Apartment Buyer Agreement. If the Allottee fails to exercise his/her right of termination within the time limit as aforesaid, by delivery to the Company of a written notice acknowledged by the Company in this regard then he/she shall not be entitled to cancel this Apartment Buyer Agreement thereafter and he/she shall continue to be bound by the provision of this Apartment Buyer Agreement.
17. In the instant case admittedly the project is still not complete and therefore the question of 'electing' to seek refund cannot be a substantial ground to deny refund. Be that as it may, the filing of the Complaint with this Consumer Forum itself can be construed to be an 'electing' to seek refund.
18. Though it is the Complainant's case that for any default, the Developer charged interest @ 18% p.a. from the buyers, having regard to the fact that the Banks have lowered the interest rate and the Hon'ble Supreme Court has been awarding interest keeping in view the current market situation and the recent decline in the cost of borrowing and return on the investments made with the Banks, we are of the considered view that simple interest @ 12% p.a. would meet the ends of justice. We also award costs of 25,000/-.
19. Hence, this Complaint is allowed in part directing the Opposite Party to refund the principal amount with interest @ 12% p.a. from the respective dates of deposit till the date of realization together with costs of 25,000/- to the Complainant.
20. Time for compliance four weeks from the date of receipt of a copy of this order, failing which the amount shall attract interest @ 14% p.a. for the same period.
© Manupatra Information Solutions Pvt. Ltd.