For TDI Infrastructure          Mr Nishit Yogi, Proxy Counsel for

                                        Ms Kanika Agnihotri, Advocate              

For the Complainant             Mr T S Khaira, Advocate and

                                        Mr Pranshu Gupta, A R

ORDER

PER SUBHASH CHANDRA

1.      This appeal under Section 21(a)(ii) of the Consumer Protection Act, 1986 (in short, the ‘Act’) challenges the order dated 30.04.2019 of the  State Disputes Redressal Commission, UT, Chandigarh (in short, the ‘State Commission’) in Complaint Case No. 853 of 2017 partly allowing the complaint. This order will also dispose of First Appeal No. 1619 of 2109 filed by the respondent as a cross appeal against the same order that is impugned in FA 1561 of 2019. As both appeals emanate from the same order and have the same set of facts, they are being disposed by way of a common order. For reasons of convenience, the facts are taken from FA 1561 of 2019. 

2.      The delay of 49 days in the filing of this complaint and of 60 days in FA 1561 of 2019 is condoned for the reasons stated in the respective applications for the condonation of delay in the interest of justice.

3.      Briefly put, the relevant facts of the case are that under a scheme for conversion of cinemas to multiplex theatres of the administration of UT, Chandigarh, appellant 2 entered into a Development Agreement on 29.03.2005 with appellant 1 to construct a multiplex called “TDI Mall” , Sector 17-A, Chandigarh after demolishing one Jagat cinema as per plan dated 15.06.2005. One Rajesh Goyal (respondent 5) entered into a Buyer’s Agreement with appellants 1 and 2 on 19.06.2006 for shop no. FF-16, First Floor in this mall for a sale consideration of Rs 45 lakhs subject to the final area being determined on completion of construction. As per Clause 8 of the Buyer’s Agreement, possession was promised by 31.03.2007 with grace period up to 30.09.2007 (i.e. within 15 months) subject to force majeure conditions including orders of the relevant authorities and Chandigarh Administration. Clause 29 further contemplated that seller (appellants) will convey the unit on receipt of requisite permissions. The unit was transferred by Rajesh Goyal to respondent 1 by sale agreement dated 29.09.2008 endorsed by appellants on 03.11.2008. Appellants 1 and 2 paid Rs 1,84,767/- by cheque as compensation for delayed possession on 26.03.2010 to respondent 5 and Rs 2,11,500/- on 08.12.2012. According to respondent 1, allotment was unilaterally changed from FF-16 to FF-15 and appellant conveyed on 17.06.2015 that possession for fit-outs would be done as soon as Occupation Certificate (OC) which was in the process of being issued, was received. Respondent 1 intimated, vide letter dated 16.07.2015, her willingness to accept possession only after OC was available. According to the appellants, the process of the OC and handing over of possession was delayed due to various reasons on account of notifications and orders of the UT Administration, including a show cause notice dated 17.08.2010 regarding plan violations which was regularized through payment of compounding fee on 25.02.2011. NOC from the Fire Department was obtained on 02.09.2013 on which date sanction of building plan was completed. However, on 08.08.2014 due to directions by the Chandigarh Heritage Conservation Committee the OC was delayed further till 12.01.2016 and possession offered on 18.01.2016 which was not taken by respondent 1.    

4.      Respondent 1 filed Complaint Case No. 853 of 2017 before the State Commission alleging deficiency in service seeking the following reliefs:

(a) Opposite parties no. 1 to 4 be directed to execute the sale deed/conveyance deed in favour of the complainant as stated in the buyer’s agreement;

(b) Opposite parties no 1 to 4 be directed to provide the details of the common area and facilities and the breakup of the super area and derivation upon carpet area of the shop and project in question;

(c)  Opposite parties no. 1 to 4 be directed to pay the amount of Rs 34,28,106/- (i.e., @ 11% on Rs 45 lakhs for 102 months from the date of committed date of possession) on account of delayed position, till offer of actual possession after receipt of completion certificate;

(d) OPs no 1 to 4 be directed to refund the excess amounts charged after the reduction of actual area of the shop in question amounting to Rs 6,70,212.76;

(e) Keeping in view the serious deficiency in service and unfair trade practices by opposite parties, complainant should be awarded compensation to the tune of Rs 3,00,000/- for harassment and mental agony;

(f)  Litigation expenses to the tune of Rs 50,000/- be awarded in favour of the complainant as the complainant are constrained to file the same because of the callous and indifferent attitude and unfair trade practices of the OP;

(g) Any other relief this Hon’ble Forum may deem fit in the interest of justice, equity and fair play especially in view of Section 14 of the Consumer Protection Act (punitive/ exemplary damages).

This complaint was disposed of by the State Commission on contest and by way of the impugned order, the complaint was partly allowed directing Opposite Parties 1 to 4 (respondents herein) to:

1. Execute and get registered the sale date in respect of the unit in question within three months from the date of receipt of certified copy of this order. The stamp duty registration charges and incidental charges if any shall be borne by the complainant;
2. Pay compensation by way of simple interest @ 11% p.a. on the deposited amount to the complainant w.e.f. 08.10.2012 up to the date of offer of position, i.e. 18.01.2016 within 45 days from the date of receipt of a certified copy of this order failing which, the said amount shall carry penal interest @ 13% p.a. (simple) instead of 11% p.a. simple from the date of default, i.e., w.e.f. expiry of period of 45 days, till realization;
3. Pay compensation in the sum of Rs 1,50,000/- on account of mental agony, physical harassment and deficiency in service and Rs 55,000/- as litigation costs to the complainant within 45 days from the date of receipt of a certified copy of the order, failing which, the said amounts shall carry interest @ 11% p.a. (simple) from the date of filing the complaint till realization.

The complaint against opposite party no. 5 was dismissed with no order as to costs.

5.     We have given our thoughtful consideration to the submissions advanced by the learned counsel at the bar and the material placed on record.

6.      The contention of the appellant is that (i) the respondent was not a ‘consumer’ as per Section 2(1)(d) of the Act but an investor and the State Commission lacked jurisdiction to entertain the complaint since the project was a commercial project which had been purchased for investment; (ii) the order was erroneous as the respondent did not establish any cause of action; (iii) the order erred in failing to appreciate that possession had been offered possession of the shop in 2016 which the respondent to take; (iv) the State Commission had erroneously held that there was delay in handing over possession since as per Clause 8 the date of possession was subject to force majeure and delay was due to orders of various authorities which delayed possession beyond 01.03.2007; (v) the State Commission failed to appreciate that even though not obligated, the appellants had compensated the respondent for Rs 3,96,267/- and hence the award of compensation @11% p.a. from 08.10.2012 to 18.01.2016 was exorbitant and not justified; and (vi) the impugned order was erroneous as deficiency in service had not been established. Learned counsel for appellant argued that as per the Buyer’s Agreement, Clauses 5 and 6 provided for the finalization of area of the plot after completion of construction; Clause 8 for possession by 31.09.2007 (including grace period); Clause 10 for no claims after taking possession and Clause 29 for execution of Sale Deed only after receipt of approvals by authorities. It was submitted that on 05.012016 respondent 1 entered into a maintenance agreement for the new unit FF-15 admeasuring 218.37 sq ft (against FF-16 admeasuring 528.75 sq ft originally allotted). Based on OC dated 12.01.2016, appellant issued a possession letter on 15.012016 followed by another offer of possession dated 22.03.2016 and possession was accepted on 23.10.2017 without prejudice. On 16.08.2018 both parties agreed before the State Commission in CC No. 853 of 2017 that the shop was ready for possession and respondent was willing to take possession following which possession was handed over by appellant on 31.10.2018. Pursuant to this, the State Commission vide its impugned order dated 30.04.2019 directed execution and registration to register the sale deed within 3 months, with compensation @ 11% p.a. on the deposited amount w.e.f 08.10.2012 till 18.01.2016 within 45 days. Counsel for the appellant contended that there was no privity of contract between it and respondent 1 who was a subsequent allottee. Reliance was placed upon Hon’ble Supreme Court’s judgment in Wg Cdr Arifur Rahman Khan & Ors. Vs. DLF Southern Homes Pvt. Ltd., (2020) 16 SCC 512 and Haryana Urban Development Authority Vs. Diwan Singh, (2010) 14 SCC 770. It is also contended that there was no justification for not accepting possession of the shop since possession had been offered on 22.03.2016. Reliance was placed on this Commission’s judgment on Vineet Kumar & Anr. Vs. DLF Universal Ltd. & Anr., 2019 SCC OnLine NCDRC 9 and Supreme Court’s judgment in Supertech Ltd. Vs. Rajni Goyal, (2019) 17 SCC 681. Appellant contended that compensation for deficiency was erroneously awarded since the delay was not due to reasons attributable to the appellant and compensation of Rs 3,96,267/- already stood paid on 31.08.2018. It was further contended that the rate of interest awarded was also excessive and in contravention of the orders of the Hon’ble Supreme Court in GDA Vs. Balbir Singh, (2004) 5 SCC 65; HUDA Vs. Raj Singh Rana, (2009)17 SCC 199 and DLF Homes Panchkula (P) Ltd. Vs. D.S. Dhanda, (2020) 16 SCC 318.

7.      Per contra, respondent 1 contended that she was a ‘consumer’ as per Section 2(1)(d) of the Consumer Protection Act, 1986 which was rightly adjudicated by the State Commission in its favour. As no new arguments had been advanced by the appellant, it was argued that the same be disregarded. It was argued that the appellant’s averment of State Commission’s lack of jurisdiction as the property was commercial and the respondent was an investor was unsubstantiated since the respondent had booked the shop unit for the purpose of earning her livelihood and the pleading that she was an investor had not been established by the appellant. It was argued that the appellant had misrepresented that respondent 1 failed to take possession of the shop after an offer of possession in 2016 in order to seek monetary gain. It was averred that the appellants concealed various communications written to them seeking details of area (super and carpet), adjustment of accounts an account of reduction of area, payment of compensation for delayed possession and to revert to letters dated 15.02.2016, 23.10.2017 and 08.11.2017.

8.      The delay in the handing over of possession sought to be ascribed to force majeure circumstances are contended by the appellant to be on grounds that are not relevant while concealing the show cause notice dated 17.08.2010 for building plan violations. It was argued that the buyer’s agreement clearly stipulated that necessary approvals had been approved from the Chief Architect, Department of Urban Planning, Chandigarh Administration. The scheme dated 13.03.2006 of the Chandigarh Administration sought to be relied upon clearly precedes the buyer’s agreement dated 19.06.2006 wherein the appellants stated that all approvals were in place. Further, the scheme of 2007 was dated 25.04.2007 which was after the date of handing over possession as mentioned in Clause 8 of the Agreement. Even the defense of conversion charges stated to have been deposited 03.04.2005 predated the buyer’s agreement dated 19.06.2006 as was evident from the receipt dated 04.04.2006 on the record. Admittedly, appellants had completed DPC completed by 09.02.2007 and hence offer of possession by 31.03.2007 as contended was incorrect. Even the letter dated 29.03.2005 was only to seek resubmission of building plan for approval. Appellant was show caused on 17.08.2010 for violation of building plans which delayed the OC. The offer of possession in 2016 was a formality. Hence, the appellant was liable for delay in handing over possession and therefore the order of the State Commission was stated to be in order.

9.      Respondent 1 contended that the State Commission had erred in holding that possession had been handed over on 31.08.2018 while granting delay compensation till 18.10.2016 with effect from 08.10.2012. It is also contended that while Clause 8 of the buyer’s agreement stipulated possession by 30.09.2007 since the respondent 1 entered into the shoes of respondent 5 on 29.09.2008 she was eligible for delay compensation from 29.09.2008, of which two tranches of compensation for 6 months each had already been received. It is also averred that the State Commission was silent over the issue of the area of the unit. It is the case of respondent 1 that the initial allotment of super area was 528.75 sq ft of which carpet area should work out to 354.26 sq ft whereas appellants had reduced the super area to 518.37 sq ft (super area) thereby reducing carpet area to 450 sq ft. However, the offer of possession was for 300 sq ft only i.e. a reduction of 78.75 sq ft. Hence, entitlement to Rs 6,70,212.76 was claimed as the sale price agreed upon was Rs 45,00,000/-. It was argued that the appellants had  held respondent’s money since 2008 and possession offered was inordinately delayed. The State Commission is stated to have erred since the respondent signed the Maintenance Agreement and the Addendum Agreement without prejudice while also conveying the same vide letter dated 15.02.2016. Respondent prayed that the reliefs claimed in FA 1619 of 2019 to modify order dated 30.04.2019 with regard to the time period for which interest was granted be changed and Rs. 6,70,212.76 to be paid on account of the actual altered area of the unit be allowed. 

10.    Respondent also relied on the following case laws in support of its contentions:

        (i)      Rohit Chaudhary & Anr. Vs. Vipul Ltd., (2024) 1 SCC 8

(ii)     Gaurav Jain & Anr. Vs. Emaar MGF Land Ltd., CC/393/2020 NCDRC

(iii)    Laureate Buildwell Pvt. Ltd. Vs Charanjeet Singh, 2021 SCC Online SC 479

4. DLF Home Development Ltd. Vs Capital Greens Flat Buyers Association, (2021) 5 SCC 537

5. Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, (2019) 5 SCC 725

11.    The preliminary objection of jurisdiction raised before the State Commission by the appellant herein relating to arbitration has been dealt with at length by the State Commission and it was held that the Act provided for additional remedies. In view of the provision in the Act that it is in addition to and not in derogation of other remedies, no grounds for interference with this finding are made out.

12.    The other preliminary objections of the appellant have also been considered. The objection that the shop was booked for purposes of investment by the respondent 1 is a bald assertion that has not been supported by evidence by the appellant. The appellant has stated that the shop was booked with the purpose of earning her livelihood and in the absence of any evidence to establish that the respondent was engaged in the business of buying and selling shops, the appellant’s assertion cannot be accepted. As for the lack of cause of action urged by the appellant in view of having offered possession, it is evident that the offer of possession dated 18.01.2016 was a legally valid offer in view of the fact that the OC had been obtained by the appellant on 12.01.2016. The possession and subsequent Maintenance Agreement and Addendum were signed without prejudice.  There was therefore a continuing cause of action for respondent no. 1 and the State Commission has acted with jurisdiction.

13.    On merits, it is manifest from the material and arguments presented before us that respondent no.5 is a subsequent allottee of a shop in the TDI Mall whose purchase from respondent 5 was duly endorsed by the appellant on 03.11.2008. There is no dispute with regard to the payment of Rs 45 lakhs sale consideration to appellant. Appellants contend that the delay was due to reasons beyond their control and due to force majeure circumstances as provided for in the Buyer’s Agreement. It is evident that the offer of possession was delayed by the appellant till 18.01.2016 for want of approval of plans and OC from the concerned authorities. It is also an admitted fact that the appellant paid two instalments of compensation for delay in offer of possession.

14.    The State Commission has considered the prayer of the respondent 1 with regard to compensation for the reduction in the super & carpet area of the shop in question. Its finding is as under:

So far as the grievance of the complainant qua change of Unit No. 16 to Unit No. 15 as stated in Clause 3 of the Addendum Agreement (Annexure C-13) and thereby altering the size of the shop from 528.75 sq ft super area to 518 sq ft super area is concerned, it may be stated here that it was so provided in Clauses 5 and 6 of the Buyers Agreement dated 19.06.2006 (Annexure C-1) and under Clause 4 of Addendum Agreement referred to above. As per Clause 5 of the Buyers Agreement referred to above, Opposite Parties 1 to 4 had the right to add, amend or change the floor plans/layout/elevation/area and unit under sale was subject to the last sanctioned plan. Further, as per Clause 6 of the same Buyers Agreement, the layout and area of the unit under sale was only tentative and the final area was to be measured on completion of the building and for the differential area, if any, the buyer was liable to pay the amount for the differential area. It may also be stated here that as per Clause 4 of above Addendum Agreement, the parties adjusted the accounts as per the area decreased of the shop and on adjustment of the accounts, the parties had agreed that no claim remained pending towards each other of any of the parties. Therefore, the contention raised by the complainant qua above two issues has no substance particularly when he has already taken the possession of the unit in question on 31.08.2018 after showing her willingness to do so, as recorded in order dated 16.08.2018.

As per, the buyers Agreement, the area of the shop in question was to be finalized on completion of the construction. An Addendum Agreement was signed between the parties (without prejudice by the respondent no.1) followed by the willingness recorded before the State Commission on 16.08.2018 to take possession. The order of the State Commission therefore, cannot be faulted on this ground.

15.   It is manifest that the respondent was a ‘consumer’ under the Act whose claim for compensation for deficiency in service on account of delay in offering compensation has been rightly upheld by the State Commission vide the impugned order. There is an admitted delay in the offer of possession of the shop in question for which the appellants had compensated respondent 1 in two tranches. The question of resiling from this admitted position at this stage therefore does not arise. The State Commission has awarded compensation for delay from 08.10.2012 till the date of offer of possession (18.01.2016) within 45 days failing which with 13% interest till realization In addition, it has awarded Rs 1,50,000/- as compensation for deficiency in service within the same period or with interest @ 11 % p.a. till realization. These directions have to be considered in the light of the law laid down by the Hon’ble Supreme Court in Wg Cdr Arifur Rehman Khan (supra) and DLF Homes Panchkula Pvt. Ltd., vs D S Dhanda (2020) 16 SCC 318, decided on 10.05.2019 which have respectively held that compensation @ 6% p.a. for delay in offer of possession is justifiable and equitable compensation where possession is being handed over and that compensation under multiple heads are not justified for a singular act constituting deficiency in service under the Act. Accordingly, compensation for the delay @ 6% p.a. on the deposited amount w.e.f. the promised date of possession (i.e., 15 months from the date respondent no.1 stepped into the shoes of respondent no.5, i.e., 03.02.2010) till the offer of possession, i.e., 18.01.2016 is justifiable. However, the compensation of Rs.1,50,000/- awarded is not justifiable in view of the law laid down by the Apex Court as stated above.

16.    In light of the discussion above, the appeal is partly allowed. Appellants 1 to 4 are directed, jointly and severally, to:

(i)     execute and register the sale deed of the unit in question within 3 months of this order on payment of necessary charges of stamp duty, registration charges, etc. by respondent no. 1;

(ii)    compensate respondent no. 1 for delay in handing over possession of the unit by way of simple interest @ 6% p.a. with effect from 03.02.2010 to 18.01.2016, the date of offer of possession within 8 weeks of this order, failing which the applicable rate of interest will be 9% p.a. after adjusting the compensation for delay of Rs.3,96,267/- already paid;

(iii)    pay respondent no. 1 litigation costs of Rs 50,000/- along with the amounts mentioned above;

The direction to pay compensation of Rs 1,50,000/- as compensation is set aside. The direction to dismiss the complaint against Opposite Party No. 5 is upheld. 

17.    Pending IAs, if any, stand disposed of with this order.