Reserved

State Consumer Disputes Redressal Commission

U.P. Lucknow.

Complaint  Case No.128 of 2019

1- Vineeta  Gaba w/o Mr Krishna Kumar Gaba,

     R/o 54, Nehru Nagar, Mawaiyya, Lucknow-226004

2- Krishna Kumar Gaba s/o Late Shri Dina Nath Gaba,

    R/o 54, Nehru Nagar, Mawaiyya, Lucknow-226004

                                                                . …Complainants.

Versus

Ansal Properties & Infrastructure Limited,

First Floor, YMCA Campus, 13, Rana Pratap

Marg, Lucknow-226001 through Managing

Director.                                                    ...Opposite parties.

Present:-­

1- Hon’ble Mr. Justice Ashok Kumar, President.

2- Hon’ble Sri Rajendra  Singh, Member.

Sri Alok Sinha, Advocate for complainants.

Smt. Surangama Sharma, Advocate for the opposite parties.

Date:  25.8.2023

JUDGMENT

Per Sri Rajendra  Singh,  Member- This complaint has been filed by the complainants for the following reliefs:

a)      To pass an order in favour of the complainants and against the opposite party directing him to pay a sum of Rs.2,500,522/– with interest @ 10% p.a. from the date of deposit till the date of actual payment.

b)      To direct the opposite party to pay Rs.5 lakh towards mental and physical harassment and economic loss.

c)      To direct the opposite party to pay Rs.60,000 towards cost of the case.

d) Any other relief which this Hon’ble Commission feels proper in the circumstances of the case.

The brief facts of the complaint case are that, that the opposite party M/s Ansal Properties and Infrastructure Limited is a real estate builder and developer company whose local office is at Lucknow and this company do the business of township, group Housing, residential building and apartments et cetera. The opposite party issued an advertisement in the year 2012 in which they promised to provide flat/apartment within 36 months from the date of booking/allotment in Olympus Lake View Apartment in Sushant Golf City. The complainants are husband and wife and they applied on 04.08.2012 for the booking of two apartments for themselves and for his daughter Ankita with the opposite party and deposited Rs.1,78,577/– and Rs.1,78,527/– total Rs.357,154/– through cheque. The opposite party allotted two BHK apartment no.B 2-602 in Olympus Lake View Apartments, having an area of 1283 square ft. and the total cost of the apartment was Rs.34,64,100/-. Due to some reason no flat has been allotted to the daughter of the complainant and when the complainant asked the opposite party to refund the booking amount of his daughter, the opposite party assured that this amount shall be adjusted towards the cost of his apartment.

According to the payment schedule, after the deposition of booking amount, on demand of the opposite party the amount was to be deposited at the interval of each two months. The opposite party issued the first call notice dated 28.09.2012 of Rs.1,78,559/-, which was paid by the complainant on 06.10.2012 through cheque. Thereafter at different call notices, till 09.10.2015 total amount of Rs.25,00,522/- has been paid. The details of the instalments paid are as follows :-

After 09.10.2015 when no call notice received from the opposite parties office, the complainants contacted opposite parties office and asked for latest status, the opposite party told that due to some unavoidable reasons the construction work is at halt. The work will start soon and possession shall be delivered by 2017. The complainants believed on this information of giving possession in 2017 and waited for the completion of the project but the opposite party did not inform him about it. The complainant went on the site in October 2018 and found that the construction work has not been completed and when enquired as to in how many years it will be completed, No clear answer was tendered by the opposite party.

According to clause 22 of Flat Buyer Letter of Agreement dated 08.06.2013, the delivery of possession of the flat was to be handed over within 36 months from the date of allotment. Till 28.10.2018, when the work of construction could not be completed of the said project, the complainant wrote a letter to opposite party at his address at Delhi and Lucknow and sent it through speed post on 28.10.2018 demanding the refund of his deposited amount-

“We have to see that despite our depositing the amounts in response to your call notices from time to time, we have not been given possession of the constructed two BHK house in Olympus Lake View Apartments up till now. It seems you are not in a position to do so now therefore, we, hereby request you to kindly refund our total money deposited in this connection within 30 days from the date of this letter with interest due.”

The opposite party did not give reply to this letter of the complainant and also did not refund his deposited money. The complainant, impressed by the advertisement of the opposite party, booked a flat in the said project and the opposite party promised to handover the possession of the flat within 36 months from the date of allotment and if he could not do so, the opposite party promised to pay interest at a rate of 10% which is mentioned in clause 22 and 18 of the Flat Buyer Letter of Agreement dated 08.06.2013.

The complainant no.2 himself visited the office of the opposite party on 08.03.2019 about the refund of his money with interest but no satisfactory answer has been given by the opposite party’s office. When the complainant demanded the statement of his deposits, the opposite party delivered a customer statement dated 08.03.2019, which confirmed the deposited amount of Rs.25,00,522/– by the complainants. The opposite party also entered in the statement to pay interest at a rate of 18% per annum for refunding the complainants amount with delay and this amount is Rs.27,132.19/–. As per agreement the delivery of possession of the flat was to be delivered by 08.06.2016 but the construction work was not completed till March 2019 and the opposite party failed to inform any fixed date regarding completion of the project. The opposite party did not return the amount of the complainant which amounts to deficiency of service and unfair trade practice. The complainants suffered great mental harassment and also physical harassment due to it and also suffered economic loss.

The opposite party sent a demand notice to the complainants on 03.04.2019 demanding Rs.5,81,967/– and also asked him to deposit this amount by 30.04.2019 but did not response to the letter of the complainant dated 20.10.2018. In this letter the complainant demanded the refund of his deposited money with interest due to non-delivery of possession of the flat in time. In response to the opposite party letter dated 03.04.2019, the complainant sent an email to their office at New Delhi on 22.04.2019 demanding to refund his deposited amount Rs.25,00,522/- with interest at a rate of 10% within 10 days but the opposite party did not response to this email. The complainant has suffered mental and physical torture unnecessary by the act of the opposite party, by his deficiency of service and unfair trade practice, the complainants are entitled to get the refund of his deposited amount of Rs.2,500,522/– along with interest at a rate of 10% from the date of deposits till actual payment and also entitled to Rs.5 lakhs as compensation and also entitled to Rs.50,000/–as cost of the case. Hence it is most humbly prayed that this Hon’ble commission may grant the reliefs as prayed by the complainants.

The opposite party filed the written statement and stated that only this much is admitted that complainant booked a unit number 3571-K-OLY-M/B2-602 in Sushant Golf City, Lucknow, the rest of the contents of complaint are wrong and misconceived hence denied specifically. There is no deficiency in the services of the opposite parties, as such, because no action has been accrued in favour of the complainant, hence the complaint of the complainant is not maintainable. The opposite parties are developing “Sushant Golf City” a high-tech township at Sultanpur  Road, Lucknow as per terms and conditions of the high-tech township policy of the state of Uttar Pradesh issued from time to time. The companies project had been acceptably appreciated by the customers and it is also well evidenced that APIL has urbanised and given successful possession to a number of customers in Lucknow project.

The complainant, after reading the terms and conditions, submitted application. The complainant has annexed copy of application form only, but the terms and conditions enclosed with the said application form has not been annexed deliberately to make out a false case against the opposite party. The contention of the complainant regarding not reading of terms and conditions of the agreement are false and has been concocted for the purpose of filing complaint. He is claiming his rights under said agreement but denying her obligation on false pretext of not reading the agreement, which apparently proves his malafides. The complainant has paid only five instalments, which are for cost of land only and he has not paid further instalments for development of land, as such, he cannot claim delay in development of plot.

The complainant has not fulfilled his obligations under the said agreement, as such, the agreement has been extensively breached by them and they cannot claim any right under the said agreement. The obligation of the opposite parties is based on timely payment of instalments by the complainant, as such, complainant is responsible for delay in development of plot of land and there is no deficiency in service of opposite parties. The claim of any amount by the complainant on alleged delay is not sustainable in law. Without the cooperation and support of the customers in terms of making timely payments the completion of the project will suffer, ultimately. Therefore you are requested to remain patient with us and clear your basic dues as soon as possible. It is clearly mentioned in the agreement that no compensation of any nature whatsoever shall be paid by the allottee(s) for the period of delay.

The complainant is an investor who has invested in the real estate business with the motive to earn profits and thus he is not a consumer under the provisions of Consumer Protection Act 1986. The respondent will file supplementary written statement in present complaint. The complainant has not come to the Hon’ble court with clean hands and had suppressed vital material facts. The complainant is in default position did not pay their dues within the prescribed time, so construction work delayed. At this stage if the complainants required his refund then the respondent are ready to refund the amount after deduction of the earnest money and without any interest and also offering to the complainant for alternate option of flat/plot in the same township. The complainant has not fulfilled her obligation under the agreement to pay the instalments timely, as such allotment of plot in his favour stands cancelled and as a consequence, there was no obligation on the opposite party, without payment of instalments for development. The complaint filed by them is not maintainable and she is not entitled for any relief and the complainant is liable to be dismissed with exemplary cost.

We have heard the learned counsel of the complainant Sri Alok Sinha and learned counsel of the opposite parties Smt. Surangama Sharma and perused the pleadings, evidences and documents on record.

The complainant has stated that in the year 2012 the opposite parties launched “Olympus Lakeview Apartments” under the Sushant Golf City. The complainant was very much impressed by the brochure of the opposite parties and he in the name of her daughter Ankita Gaba and in the name of complainant’s applied for the allotment of two apartments on 04.08.2012 and paid Rs.178,577/– and Rs.178,577/– as booking amount by way of cheques. The opposite parties issued the receipt number 245164 and 245165  for the said amounts. Thereafter the opposite parties allotted apartment no B 2-602 in the name of the complainants and executed Flat Buyer Letter of Agreement dated 08.06.2013 in which the area of the flat has been shown as 1283 square ft and cost of the flat as Rs.3,464,100/-.So it was the duty of the opposite party to deliver the possession of the flat in the stipulated time as promised in the Flat Buyer Agreement. Before discussing further we have to see the object of the Consumer Protection Act 1986.

What are the main objectives of consumer protection 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.

On which products are these right applicable?

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.

Objectives of consumer protection act

• 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.

Let us know more about the rights and responsiblities of consumer:

Consumer Rights

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.

Consumer Responsibilities

• Responsibility to be aware – A consumer has to be careful of the safety and quality of products and services before purchasing.
• Responsibility to think independently– Consumer should be well bothered about what they want and need and hence make independent choices.
• Responsibility to speak out- The buyer should be fearless to speak out their problems and tell to traders what they exactly want
• Responsibility to complain- It becomes the consumer’s responsibility to express and file a complaint about their dissatisfaction with goods or services in a sincere and fair manner.
• Responsibility to be an Ethical Consumer- Consumer must be fair and not engage themselves with any deceptive practice.

The Consumer Protection Act 1986 was enacted to provide for better protection of the interests of consumers and for that purpose to make provision for the establishment of Consumers Councils and other authorities for the settlement of consumers’ disputes and for matters connected therewith (Preamble).

The Act Inter alia, seeks to promote and protect the rights of consumers such as —

1. right to be protected against marketing of goods which are hazardous to life and property;
2. right to be informed about the quality, quantity, potency, purity, standard and price of goods to protect the consumer against unfair trade practices;
3. right to be assured, wherever possible, access to variety of goods at competitive prices;
4. right to be heard and to assured that customers’

interests will receive due consideration at appropriate forums.

5. Right to seek redressal against unfair practices or

unscrupulous exploitation of consumers; and

The objects are sought to be promoted and protected by the Consumer Protection Councils to be established at the Central and State levels.

The Act applies to all goods and services, except if otherwise provided by the Central Government by Notification. To provide speedy and simple redressal of consumer disputes, a quasi judicial machinery is set up at the District, State and Central levels. The three tier system of quasi judicial bodies will observe the principle of natural justice and are empowered to give relief of a specific nature and to award, wherever appropriate, compensation to consumers. Penalties for non-compliance of the orders given by the quasi judicial bodies have also been provided.

Thus the Consumer Protection Act is to serve the interests of the consumers. Consumer education and redressal of consumers’ grievances are the two aspects of the Act. It makes good the loss a consumer suffers and increases the feeling of responsibility of the manufacturer, trader, supplier or businessman.

The provisions of the Act have to be construed in favor of the consumer to achieve the purpose of enactment as it is social benefit oriented legislation. The primary duty of the Court while construing the provisions of such an Act is to adopt a constructive approach subject to that it should not do violence to the language of the provisions and not contrary to attempted objective of the enactment.

Extent of Consumer Protection:

While other legislations may be either punitive or preventive, the Consumer Protection Act compensates the consumer. The provisions of the Act are in addition to and not in derogation of the provisions of any law at the time being in force (Sec 3). In Maine Container Services South Pvt Ltd v Go Garments 1998 (3) SCC 247 it has been held that the Contract Act applies to all litigants before the Commissioner under the Consumers Protection Act. Passengers traveling in train suffering injuries and loss of Jewelry as a result of assault by unruly crowd are eligible for filing of complaint before State Commission is maintainable notwithstanding the provisions of sections 100 and 103 of Railways Act, 1889. The Consumer Protection Act therefore gives the consumer an additional remedy besides those which may be available under other existing laws. Existence of an arbitration clause in the agreement is no bar to the entertainment of complaint by the Redressal Agency as the remedy under the Act is in addition to the provisions of any other law. However, the Consumer Forums under the Act have not taken over the jurisdiction of civil Courts. If the dispute between the parties is pending in Civil Court no Consumer Forum will adjudicate the dispute. Similarly if evidence be laid by the parties to the dispute is voluminous or complicated the parties will be referred to the appropriate Civil Court.

Consumers Protection Act, thus enshrines the rights of a consumer to be informed about the quality, quantity, potency, price etc., of the goods to be protected against unfair trade practices, to seek inexpensive and expeditious redressal of grievances before the Consumer Forums. Consumer Protection Act is a benevolent piece of legislation to protect a large body of consumers from exploitation.
So the main object of the consumer protection act is to safeguard the interest of the consumer and this act is in addition to any other act and not in derogation of any other act. We have perused the order sheet and found that the opposite party is in a habit of misleading this court continuously and he is not complying with the order of this court which shows arrogance of the opposite party.

The opposite party, in his written statement has stated that the complainant has paid only five instalments which are for cost of the land only and he did not pay further instalments for the development of land. We have seen the copy of receipts issued by the opposite party to the complainant. The complainant has specifically mentioned that he has paid Rs.25,00,522/- and all the receipts number have been mentioned in para-4 of the complaint. No adverse facts have been filed by the opposite party and his denial is vague.

We have seen the brochure of the Olympus Lakeview which is present on record. In clause 22 of the builder buyer agreement it has been specifically mentioned,

“that the developer shall endeavour to offer possession of apartment to the allottee within 36 months from the date of sanction of building plans by the authorities subject to force majeure circumstances and on receipt of complete payment of the basic sale price and other charges due and payable up to the date of possession according to the payment plan applicable to allottee punctually…”

So it is clear that the delivery of the possession was to be handed over within 36 months from the date of sanction of building plans and it is very important to note that whatever has been written or mentioned in any flat buyer agreement, the reasonable time to construct a flat is three years as held by Hon’ble Supreme Court.

Hon’ble Supreme Court in civil appeal number (S) 3533-3534 of 2017, M/S Fortune infrastructure (NOW known as M/S Hicon Infrastructure) & Anr.  Vs.  Trevor D’Lima & Ors., Judgment 12.03.2018 has held:-

“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 ?”

The complainant has specifically mentioned that after 09.10.2015 no call letter has been sent by the opposite party to the complainant. The flat was to be delivered as per flat buyer agreement and also as per the judgment of this Hon’ble Supreme Court, within three years that is by 8 June, 2016. The flat/plot was not delivered to the complainant. No reason has been shown by the opposite party for the delay in the delivery of possession of the allotted flat. Ultimately the complainant asked for the refund of his deposited amount with interest. This is a clear case of harassment and mental torture by the opposite party that’s why the complainant compiled to demand the refund of his deposited amount.

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], the Hon’ble Supreme Court has held:

“This appeal arises from the judgment dated 21 November 2016 of the National Consumer Disputes Redressal Commission. A Buyer's Agreement dated 2 July 2007 was entered into between the appellant and the respondent. The respondent paid an amount of Rs 39,29,280 in 2006 in terms of a letter of allotment dated 20 September 2006. The agreement between the parties envisaged that the appellant would hand over possession of a Row House to the respondent by 31 December 2008 with a grace period of a further six months ending on 30 June 2009.

The respondent filed a consumer complaint before the West Bengal State Consumer Disputes Redressal Commission2 in 2011 1 "NCDRC" "SCDRC" 2 praying for possession of the Row House and in the alternative for the refund of the amount paid to the developer together with interest at 12% per annum. Compensation of Rs 20 lakhs was also claimed. The SCDRC allowed the complaint by directing the appellant to refund the moneys paid by the respondent together with interest at 12% per annum and compensation of Rs 5 lakhs. The NCDRC has modified this order by reducing the compensation from Rs 5 lakhs to Rs 2 lakhs. Mr. Ravinder Narain, learned counsel appearing on behalf of the appellant submits that the primary relief which was sought in the consumer complaint was for delivery of possession. According to the appellant, the completion certificate was received on 29 March 2016, which was intimated to the respondent on 11 April 2016.

Moreover, before the SCDRC, in its written submissions, the appellant had offered possession of the Row House to the respondent. It has also been stated that in a complaint which was filed by an association representing the allottees of 161 Row houses, a settlement was arrived on 11 September 2018 before the NCDRC specifying the date on which possession would be handed over together with interest at 6% per annum instead of 4% as mentioned in the Buyers' Agreement. It was urged that the developer having made a substantial investment in terms of the agreement, a direction for refund is not warranted. It has also been urged that the SCDRC in the course of its decision erroneously observed that the developer was unable to fulfill its obligation to complete the construction within the agreed period and it was not certain when the Row house would be handed over. It was urged that this observation by the SCDRC is contrary to the record since before it, a specific offer of possession was made. 

It has been urged on behalf of the respondent by Mr. Supriya Bose, learned senior counsel that a consumer complaint was filed in the year 2011. At that stage, the appellant was bonafide ready and willing to accept possession. However, nearly seven years have elapsed after the extended date for the delivery of possession which expired on 30 June 2009. In spite of this, no offer of possession was forthcoming. Learned senior counsel submitted that the letter dated 22 March 2016 of the developer was conditional and despite the subsequent letter dated 11 April 2016, no formal offer of possession was ever made by the appellant. Moreover, it was urged that the interest awarded by the NCDRC at the rate of 12% is just having regard to the economic loss and hardship suffered by the respondent. While considering the rival submissions, we must at the outset advert to the following clause which was contained in the Buyer's Agreement:

"Unless prevented by circumstances beyond the control of the company and subject to Force Majeure, KWIC shall ensure to complete the said unit in all respect within 31st December 2008 only for the Cluster D. Further there will be a grace period of 6 months (up to 30th June, 2009) from the date of completion. In case the possession is not transferred after expiry of the said grace period, KWIC will be liable to pay prevailing 4 saving Bank interest of the State Bank of India for each month of delay on the money given by the allottee as compensation but no compensation will be paid on account of force majeure reasons." It is the above clause which is pressed in aid by the developer. Under the aforesaid clause, any delay beyond 30 June 2009 would result in the developer being required to pay interest at the prevailing savings bank interest of the State Bank of India.

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.

The clause which has been extracted in the earlier part of this order will not preclude the right and remedy available to the buyer to claim reasonable interest or, as the case may be, compensation. The essential aspect of the case which is required to be analysed is whether the buyer was entitled to seek a refund or was estopped from doing so, having claimed compensation as the primary relief in the consumer complaint.

The Buyer's Agreement is dated 2 July 2007. In terms of the agreement, the date for handing over possession was 31 December 2008, with a grace period of six months. Even in 2011, when the buyer filed a consumer complaint, he was ready and willing to accept possession. 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. Having regard to all the facts and circumstances of the case, we modify the order of the NCDRC by directing that the appellant shall pay interest at the rate of 9% per annum to the respondent instead and in place of 12% as directed by the NCDRC. Save and except for the above modification, we affirm the directions of the NCDRC.

The amount outstanding in terms of the directions of this Court shall be released out of the moneys which have been deposited by the appellant. The balance, if any, that remains shall be refunded to the appellant. The appeal is, accordingly, disposed of. There shall be no order as to costs. Pending application(s), if any, shall stand disposed of.

(J. DR. DHANANJAYA Y. CHANDRACHUD)

(HEMANT GUPTA)

NEW DELHI: MARCH 25, 2019”

From the facts and circumstances it has been clear that the possession of the plot/flat has not been delivered within the time as promised by the opposite party and hence the complainant has been compelled to withdraw his deposited amount and he paid for it but in spite of it his money was not refunded by the opposite party and thereafter the complainant has no option except to come before this court. We have to see what the amount of compensation, amount of interest, any other damages or compensation due to suffering or cost of the case and mental torture be paid to the complainants. For the purpose of calculation these amounts the cut of date is taken as 08.06.2016 but for the purpose to ease the calculation we take the cut-off date as 01.07.2016.

In the case of PRIYANKA MITTAL & ANR. V. PARSVNATH DEVELOPERS LTD. & ANR.

“PER JUSTICE K.S. CHAUDHARI, PRESIDING MEMBER These appeals arise out of single order of State Commission, hence, decided by common order. These appeals have been filed appellant against order dated 25.2.2015 in Complainant 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 ;byLtd. &Anr.; 97 of 2011- Pravin Kumar Goel & Anr. Vs. Parsvnath Developers Ltd. & Anr which complaints were partly allowed. (NCDRC)

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 -10- 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. Ad aggrieved  by  the  order  of  Hon’ble  State  Commission , these  appeals preferred  befpre 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  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  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. Complainants- Nalin Bhargava in and complainant’s Complaint No.18 of 2013 Ravindra Singh in , are entitled to get only difference of amount from Complaint No.32 of 2012 -14- the amount already awarded by State Commission which has not been challenged by opposite party. Perusal of record reveals that in Complaint No.987 of 2011, Pravin Kumar Goel Vs. flat area of complainant has been increased and additional Rs.7,99,997/- Parsvnath Developers has been demanded by opposite party from complainant but Learned State Commission has not allowed penalty as per clause 10 (c) for the increased area and complainants are entitled to get penalty as per aforesaid clause on the increased area also. Consequently, appeals filed by appellants are partly allowed and order dated 25.2.2015 passed by Learned State Commission in the aforesaid complaints is modified and opposite party is directed to pay @ Rs.15,000/- p.m. and Rs. 20,000/- to the allottees of flats upto 175 sq. mt. and above 175 sq mtr respectively from beginning of 55 month from the date of execution of flatth buyer agreement till delivery of possession of flat to the complainants and complainants in and are entitled to receive only difference Complaint No.18 of 2013 Complainant No.32 of 2012 of amount as stated above and opposite party is directed to pay penalty to complainant in on the increased area as per clause 10 (c ) of the agreement. Complaint No.97 of 2011 Parties to bear their costs.”

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.”

The case of Ghaziabad Development Authority v BalbirSingh , (2004)4 SCC 65 is a landmark decision that laid down certain judicial standards regarding the grounds on which compensation may be awarded, particularly, in matters of allotment of flats/plots by land development authorities. Compensation under consumer protection laws is required to recompense for loss or injury suffered by consumers, and therefore, the quantum of compensation to be awarded would necessarily have to be determined based on the facts and circumstances of each case. This decision set an established precedent on the issue of compensation to be awarded in consumer disputes, and its principles have been relied upon in numerous subsequent cases.

Introduction

The consumer protection laws establish a redressal mechanism whereby consumers can claim monetary reliefs for defective goods, deficiency in service, and unfair trade practices. Sections 14 and 22 of the Consumer Protection Act, 1986 empower the District, State, and National Consumer Disputes Redressal Commission to “to pay such amount as may be awarded by it as compensation to the consumer for any loss or injury suffered by the consumer due to the negligence of the opposite party”. Such monetary reliefs i.e., compensation awarded would have to be based on the facts and circumstances of each case, since the loss and injury suffered would vary. Given the absence of a straight-jacket formula for the determination of the amount of compensation to be awarded in each case, it follows that there can be no uniformity in the award of compensation.

It is for the Consumer Forum to grant compensation to the extent it finds it reasonable, fair, and proper in the facts and circumstances of a given case according to the established judicial standards where the claimant can establish his charge.Ghaziabad Development Authority v Balbir Singh

Background and Facts of the Case

The present case of Ghaziabad Development Authority v Balbir Singh arose out of an appeal directed against the judgment and award passed by the National Consumer Disputes Redressal Commission (NCDRC) awarding an interest @ 18% per annum. The Commission was considering a bunch of matters, the lead being the case of Haryana Urban Development Authority vs. Darsh Kumar, where it held that in cases of deficiency of service by development authorities, the rate of interest awarded must be 18% per annum. Following this, the Commission disposed of subsequent matters by its preceding award. Numerous appeals were filed before the Supreme Court against the decision of the Commission in various cases, primarily against its award of 18% interest.

Since the Supreme Court was considering a wide number of matters relating to allotment of land by development authorities, the facts of each case vary. In some cases, the scheme had gotten canceled after the payment of monies and allotment of flats/plots. Delivery of possession of the flats was therefore refused to the allottees. In some cases, either possession was offered at an increased rate at a much later date possession or was offered but not taken by the party. Possession was not delivered in some cases despite payment of monies and no refusal to deliver possession. In some cases, the construction was of sub-standard quality or it was incomplete, or the authority demanded extra amounts from the party which was paid only by some. In some cases, allotments were made and possession offered of flats/land which was encumbered or occupied by some other party

The appeal in the Supreme Court was filed due to the Commission granting interest at the rate of 18% per annum irrespective of the type of case or amount of delay and without even going into the facts of the case. Complainants had asked for the refund of amounts wrongly collected and in other cases, asked for a refund of the amounts paid.

Issues Involved

1. Whether the grant of interest at the rate of 18% per annum by the National Consumer Disputes Redressal Commission in all cases is justifiable?

Related Provisions

Section 14 of the Consumer Protection Act, 1986

Section 22 of the Consumer Protection Act, 1986

Related Cases

The Supreme Court relied upon the case of Lucknow Development Authority v. M. K. Gupta

The Court relied upon the English case Geddis v. Proprietors of Bann ReservoirCompensation has not been defined in the Act. According to the dictionary, it means, ‘compensating or being compensated; thing given as recompense;’. In a legal sense, it may constitute actual loss or expected loss and may extend to physical mental or even emotional suffering, insult or injury or loss.”

Judgment

The Supreme Court, at the outset, reiterated the position taken in the case of Lucknow Development Authority v. M.K. Gupta, and held that “the Consumer Protection Act has a wide reach and the Commission has jurisdiction even in cases of service rendered by statutory and public authorities”. It further held that the power of the NCDRC extends to awarding compensation to consumers for misfeasance in the public office i.e. an act which is oppressive or capricious or arbitrary or negligent provided loss or injury is suffered by a citizen. Therefore, it upheld the appeals filed before it to the extent that it confirmed the jurisdiction of the NCDRC to award compensation in cases of service rendered by statutory & public authorities (the land development authorities in the present case).

As to the issue of whether the grant of interest at the rate of 18% per annum by the NCDRC in all cases is justifiable, the Supreme Court held in the negative. It stated that “the power to 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.” It held it to be unsustainable. The Court further stated that the “Award of compensation must be under different separate heads and must vary from case to case depending on the facts of each case.” The purpose of awarding compensation is to recompense for a loss or injury suffered and such compensation would therefore be proportional to the amount of loss and injury.

While considering the compensation to be awarded to the consumers in cases of deficiency of service by Development Authorities, the Court laid down a range of principles for the determination of the amount of compensation, summarised below:

• To award compensation, the Forum or the Commission must determine that service has been deficient and/or misfeasance in public office which has resulted in loss or injury. While no hard and fast rule can be laid down, the Court gave a few instances where the award of compensation would be justifiable, including where possession is not handed over within the intimated period even though allotment is made and the price is paid. In such cases, the loss could be determined based on loss of rent which could have been earned if possession was given. Compensation could also be the scheme has been canceled without any justifiable cause, after the allotment.
•   Compensation cannot be uniform and to illustrate this, the Court lays down the principle to be followed for the determination of compensation in two cases- – (a) where the delivery of possession is being directed, and (b) where only the monies are directed to be returned or refunded by the Court. In case (a), the compensation for harassment will necessarily have to be less since in a way the aggrieved party is being compensated by an increase in the value of the property he is getting. In case (b) however, the party is suffering a greater loss since he has been deprived of the flat/plot, and his expectation of delivery of possession. He would also be denied the benefit of an increase in the value of land and the compensation thereof. Therefore, the compensation to be awarded in such cases would have to be higher than in case (a).

The Court held that “such compensation has to be worked out

after looking into the facts of each case and after determining what is the amount of harassment/loss which has been caused to the consumer.”

• Compensation would include compensation for physical, mental, or even emotional suffering, insult, or injury or loss.

Awarding of Compensation in the Event of Deficiency in

Service Rendered

The consumer protection laws have a wide reach and the consumers are entitled to receive compensation for deficiency in services rendered by statutory and public authorities. The Consumer Commissions have been vested with the jurisdiction to award the value of goods or services and compensation. On being satisfied that a complainant is entitled to compensation for loss or injury or harassment or mental agony or oppression, it must direct the authority to pay compensation. A wide discretion has been given to determine the quantum of compensation for any loss or damage suffered by a consumer, to redress any injustice. However, it is a well-established principle that the computation of compensation has to be fair, reasonable, and must reconcile with the loss or injury suffered. The Consumer Forum is cast with the duty to take into account all relevant factors for arriving at the compensation to be paid.

This landmark decision has set a precedent on the matter of compensation to be awarded in matters relating to allotment of land by development authorities and has been relied upon in many subsequent cases of the Supreme Court. In the case of H. P. Housing Board v Varinder Kumar Garg and Haryana Urban Development Authority vs Darsh KumarGhaziabad Development Authority vs. Balbir Singh in future cases.

Conclusion

This landmark decision laid down rudimentary principles and set judicial standards concerning the awarding of compensation and the determination of the quantum of compensation to be awarded. It struck down the mechanical application of a fixed rate of interest at 18% per annum by the National Commission in numerous cases, asserting that there can be no hard and fast rule.

The principles enunciated go a long way in ensuring that consumers are compensated appropriately and proportionally for the loss and injury suffered. This decision has further strengthened the consumer protection laws by bringing clarity to how the consumer is required to award compensation. 

References

• Indian Kanoon https://indiankanoon.org/

• Consumer Protection Act, 1986 http://legislative.gov.in/sites/default/files/A1986-68_0.pdf

In a latest case, on Supreme Court in Petition(s) for Special Leave to Appeal (C) No(s). 24059/2022 (Arising out of impugned final judgment and order dated 19-09-2022 in RP No. 1187/2022 passed by the National Consumers Disputes Redressal Commission, New Delhi) MEERUT DEVELOPMENT AUTHORITY Petitioner(s) VERSUS SURESH CHAND GARG Respondent(s) (FOR ADMISSION and IA No.202401/2022-EXEMPTION FROM FILING O.T. ) Date: 05-01-2023 This petition was called on for hearing today.

Held

“We have heard learned counsel for the petitioner and find that the order passed by the Consumer Commission was reasonable and there was no reason of filing appeal/revision against the substantive order passed on the consumer complaint by the District Consumer Commission dated 06.09.2019. Consequently, the present petition is disposed of with a direction, to sum up the litigation which is pending for a long time, that let the order of the District Consumer Commission dated 06.09.2019 shall be complied with and the respondent be refunded the entire deposit with simple interest at the rate of 12% per annum within a further period of 60 days from today, failing which it shall carry interest at the rate of 15% per annum until actual payment.”

So the Hon’ble Supreme Court has specifically said that the rate of interest shall be 12% if paid within 60 days from the date of judgment otherwise the rate of interest will be 15% per annum until actual payment. In the present case we have taken the cut of date as 01.07.2015. No we perused the different judgment as mentioned here in above regarding the payment of rent, compensation et cetera, it is clear that the possession has been given to the complainant but in absence of the CC and OC it is not a possession in the of law. Therefore the compensation, damages, interest and other reliefs shall be given to the complainant from cut of date till the date when the copy of Completion Certificate/Occupation Certificate and NOCs from different department be provided to the complainant.

Hon’ble Supreme Court in the case of Haryana Urban Development ..... vs. Darsh Kumar, Etc., Civil Appeal no 5796 of 2002 decided on 28 July, 2004 has held ;

“This Court has, in the case of Ghaziabad Development Authority vs. Balbir Singh reported in (2004) 5 SCC 65, deprecated this practice. This Court has held that interest at the rate of 18% cannot be granted in all cases irrespective of the facts of the case. This Court has held that the Consumer Forums could grant damages/compensation for mental agony/harassment where it finds misfeasance in public office. This Court has held that such compensation is a recompense for the loss or injury and it necessarily has to be based on a finding of loss or injury and must co-relate with the amount of loss or injury. This Court has held that the Forum or the Commission thus had to determine that there was deficiency in service and/or misfeasance in public office and that it has resulted in loss or injury. This Court has also laid down certain other guidelines which the Forum or the Commission has to follow in future cases.

We are informed that in spite of there being no stay, to payment of interest beyond 12% and in spite of clarification given by this Court's order (reported in (2004) 5 SCC 65), the amounts have still not been paid. We feel that for the lapse Appellants must pay interest at the rate of 15% from 17th March, 2004 till payment. Appellants shall also pay costs fixed at Rs.500/- in each case to the Legal Aid Society of the Supreme Court. The Appellants must recover the amount paid towards costs personally from the officer/s, who were responsible for not paying even after clarification by this Court. We clarify that this Order shall not be taken as a precedent in any other matter as the order has been passed taking special features of the case into account. The Forum/Commission will follow the principles laid down by this Court in the case of Ghaziabad Development Authority vs. Balbir Singh (supra) in future cases. The Appeals are disposed off in above terms. There will be no order as to costs.”

In this case, now it has become clear that for the purpose of ascertaining the amount of compensation and interest thereon, the cut of date is taken as 1.7.2016.

As far as relief ‘D’ is concerned, this court is of the view that in the light of judgment of the Hon’ble NCDRC the complainants will be entitled to get loss of rent of Rs.15,000.00 per month from 1.7.2016 till the actual date of payment. Also under relief ‘D’ the complainants are entitled for a lumpsum amount of Rs.20 lacs towards mental harassment, agony, depression, deficiency in service and unfair trade practice.

As far as rest of the reliefs are concerned, the complainants are entitled to get rest reliefs. Therefore, after going through all the facts and circumstances of the case we are of the opinion that the complainants are entitled to get various reliefs.

1-      The complainants are entitled to get refund of his deposited amount of Rs.25,00,522/– with interest @10% per annum from 1.7.2016, if paid within 60 days from the date of judgment of this complaint case otherwise the rate of interest shall be 15% per annum from 01.07.2016 till the date of actual payment. (As per the judgment of the Hon’ble NCDRC).

2-      The complainants are entitled to get Rs.5 lakhs towards economic loss with interest at a rate of 10% from 01.07.2016, if paid within 60 days from the date of judgment of this complaint case otherwise the rate of interest shall be 15% per annum from 01.07.2016 till the date of actual payment.

3-      The complainants are entitled to get Rs.60,000/- towards cost of the case, if paid within 60 days from the date of judgment of this complaint case otherwise the rate of interest shall be 15% per annum from 01.07.2016 till the date of actual payment.

4-      The complainants are entitled to get Rs.15,000.00 per month for the loss of rent (as per judgment of Hon’ble NCDRC) from 01.07.2016 with interest @ 10% from 01.07.2016, if paid within 60 days from the date of judgment of this complaint case otherwise the rate of interest shall be 15% per annum from 01.07.2016 till the date of actual payment.

5-      The complainants are entitled to get Rs.20 lacs towards mental harassment, agony, depression, deficiency in service and unfair trade practice (as per judgment of Hon’ble Supreme Court) with interest @ 10% from 01.07.2016, if paid within 60 days from the date of judgment of this complaint case otherwise the rate of interest shall be 15% per annum from 01.07.2016 till the date of actual payment.

The complaint is decided accordingly.

                       ORDER

1-      The opposite party is directed to refund the deposited amount of Rs.25,00,522/– with interest @10% per annum from 1.7.2016 to the complainants, if paid within 60 days from the date of judgment of this complaint case otherwise the rate of interest shall be 15% per annum from 01.07.2016 till the date of actual payment. (As per the judgment of the Hon’ble Supreme Court).

2-      The opposite party is directed to pay to the complainants Rs.5 lakhs towards economic loss with interest at a rate of 10% from 01.07.2016, if paid within 60 days from the date of judgment of this complaint case otherwise the rate of interest shall be 15% per annum from 01.07.2016 till the date of actual payment.

3-      The opposite party is directed to pay to the complainants Rs.60,000/- towards cost of the case, if paid within 60 days from the date of judgment of this complaint case otherwise the rate of interest shall be 15% per annum from 01.07.2016 till the date of actual payment.

4-      The opposite party is directed to pay to the complainants Rs.15,000.00 per month for the loss of rent (as per judgment of Hon’ble NCDRC) from 01.07.2016 with interest @ 10% from 01.07.2016, if paid within 60 days from the date of judgment of this complaint case otherwise the rate of interest shall be 15% per annum from 01.07.2016 till the date of actual payment.

5-      The opposite party is directed to pay to the complainants Rs.20 lacs towards mental harassment, agony, depression, deficiency in service and unfair trade practice  with interest @ 10% from 01.07.2016, if paid within 60 days from the date of judgment of this complaint case otherwise the rate of interest shall be 15% per annum from 01.07.2016 till the date of actual payment.

If the judgment is not complied with, within 60 days from the date of judgment of this complaint case, the complainant shall be at liberty to file execution case against the opposite party at his cost.

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.

       (Justice Ashok Kumar)                 (Rajendra Singh)

                   President                                Member

Judgment dated/typed signed by us and pronounced in the open court.

Consign to Record  Room.

       (Justice Ashok Kumar)                 (Rajendra Singh)

                   President                                Member

Dated   25.8.2023

Jafri, PA I

Court 1