BEFORE:

HON’BLE MR. SUBHASH CHANDRA, PRESIDING MEMBER

For the Appellant (s)      :    Mr. B. S. Sharma, Advocate   

For the Respondent(s)    :    Mr. Navdeep Singh, Advocate proxy with

                                       Authority letter

ORDER

1.     This Appeal under Section 19 of the Consumer Protection Act, 1986 (in short, the ‘Act’) is directed against the order dated 12.12.2017 of the State Consumer Dispute Redressal Commission, U.P., Lucknow (in short, ‘State Commission’) in Complaint Case No. 45 of 2016 partly allowing the complaint and directing the Respondent herein to complete construction of the flat and hand over possession within 3 months of the order after receiving the balance amount and to execute the required documents failing which to pay interest @ 10% p.a. to the Appellant herein till the date of handing over possession. In case possession was not handed over in 1 year, interest @ 15% p.a. was to be paid till the date of possession. Rs 10,000/- was also awarded to be paid as the cost of litigation to the Appellant.

2.     This order will also dispose of First Appeal Nos. 44, 2000 and 2001 2018 which emanate from the same order and involve similar set of facts. For the sake of convenience, the facts of the case are taken from Consumer Complaint No. 45 of 2018 which is treated as the lead case.

3.      Briefly stated the relevant facts of the case are that the Appellant/complainant had booked a residential flat in Respondent/opposite party’s project “Celebrity Meadows” in Sushant Golf City Sultanpur Road Lucknow. A 3 BHK flat, No. 02, Floor 04, Tower L ad measuring 1970 square feet @ Rs 1794.50 per sq ft was allotted by the respondent for a total sale consideration of Rs 35,35,165/- inclusive of and a booking amount of Rs 1,82,000/- was deposited with the Respondents with the issue of an allotment letter dated 20.10.2010. Possession was promised as per Clause 13 of the Allotment Letter within 36 months of the date of sanction of building plans by the authorities concerned subject to force majeure circumstances and receipt of complete payment of sale price and other dues. Between 12.10.2010 to 26.10.2015 the Appellant deposited Rs 32,38,255/- with the Respondent. According to the Appellant, possession was to be handed over on 20.10.2013 which was not done. As per demand letter dated 21.02.2015 the Appellant paid Rs 1,76,987/- on account of change in area of the allotted flat. Another demand for Rs 3,50,364.50 was raised vide letter dated 08.10.2015. As no possession was being offered, Appellants approached the State Commission in Complaint Case No. 45 of 2016 praying that the Respondent/opposite party be directed to:

(a)    Deliver possession of the flat to the complainants, finished, ready and complete in all respects as per specifications and with all the services, facilities, internal and external development, for which the complainants had paid or shall pay at the time of possession;

(b)    Deliver the possession of the flat as on the agreed amount to the complainant within the stipulated time as this Hon’ble Court may deem fit and proper;

(c)    Pay the complainant a compensation in the form of compound interest at the rate of 18% per annum against the total amount deposited to the respondent/ opposite party because of the losses suffered in deficiency in services of delay in providing the flat to the complainant;

(d)    Pay a compensation of Rs 1,00,000/- per year for harassment and mental agony to the complainant;

(e)    Bear the additional amount due to increase in rates of service tax, stamp duty amount, of sale deed due to increase in circle rates and difference of amount due to increase in registration fees w.e.f. 19.10.2013;

(f)     Pay compensation and special damages and litigation cost;

(g)    Any other and further relief in favour of the complainant as the Honourable court may deem fit and proper in the facts and circumstances of the case.       

4.     The complaint was disposed of on contest by the State Commission vide the impugned order whereby it was directed as under:

The above complaint is partly allowed and opposite parties are directed to complete the construction of the flat and further give possession within three months from the date of this order after receiving the balance amount and to execute the required documents. If the opposite party fails to give possession of the flat after construction, then, after completion of this prescribed time, interest @ 10% per annum will be given to the petitioner till the date of possession. After that, if the possession of the flat is not given within one year, then, after completion of one year, interest @ 15% per annum will be given to the complainant till the date of possession. Opposite parties are liable to pay Rs 10,000 as litigation cost to the complainant.

5.     Aggrieved by this order, the Appellants are before us. We have heard the Learned Counsel for both the parties and perused the record carefully.

6.      On behalf of the Appellant/complainant it was contended that the impugned order was erroneous since it ignored the fact that the allotment letter clearly stated that possession of the flat was to be given within 36 months from the date of the allotment letter/agreement i.e., by 19.10.2013 and that extension of the period for handing over possession by three months from the date of order by the State Commission was unreasonable. As per the Appellant, compensation should also have been directed to be paid with immediate effect as the Appellant/complainant was residing in a rented flat and paying a rent of Rs 21,000/- per month which was escalating on an annual basis. It was also contended that the State Commission’s order ignored the fact that the respondent had illegally demanded an additional amount for the change in area of the flat and which the State Commission failed to direct the refund of with interest. The Appellant submitted that the State Commission also erred in not appreciating that the Respondent should be directed to pay compensation interest on the total amount deposited from the due date of possession 19.10.2013 because of deficiency in service as per the allotment letter. It was also contended that the State Commission had erred in not directing payment of compensation of Rs 1,00,000/- per year for harassment and mental agony faced by the appellant. Further, it was also submitted that the Respondents should have been directed by the State Commission to bear the additional amount due to increase in rates of service tax, stamp duty, sale deed due to increase in circle rates and the difference of amount due to increase in registration fees from 19.10.2013. A compensation at a higher rate along with higher litigation cost was prayed for in view of deficiency in service and unfair trade practice in not handing over possession of the flat as undertaken in the Allotment Letter.

7.      On behalf of the Respondent it was argued that the appeal was without merits and deserved to be dismissed. It was contended that the project was promoted jointly with the Lucknow Development Authority by the Respondent under a Memorandum of Understanding (MoU) as per the Hi-Tech Township Policy, 2007. The Builder Buyer Agreement dated 03.10.2010 signed between the parties, the Appellant had failed to honour her commitment to pay the full consideration towards the sale consideration. It was contended that the delay in the completion of the project was due to reasons beyond its control due to force majeure circumstances and the fact that under the public private partnership model of the project, there were various impediments which delayed the project. During oral submissions it was also submitted that the project was delayed since the Covid 19 pandemic and thereafter insolvency proceedings before the NCLT were underway. It was claimed that as per Clause 13 the Respondents were entitled reasonable extension of time to complete the project. It was submitted that the Respondents were ready to complete and offer possession provided the full payment was made by the Appellant.

8.      From the foregoing it is manifest that the Respondent/opposite party failed to complete the project as per the time line indicated and that the delay in making an offer of possession is inordinate since it is more than 10 years. During arguments the counsel for the Respondent admitted that neither was the project complete as on date nor had an Occupancy or Completion Certificate been obtained from the authorities concerned. The State Commission has failed to appreciate the fact that the Respondents were not in any position to complete and offer possession to the Appellant/complainant.

9.      The Hon’ble Supreme Court has laid down in Pioneer Urban Land and Infrastructure Ltd. Vs. Geetu Gidwani Verma & Anr., Civil Appeal No. 12238 of 2018 with No. 1677 of 2019 dated 02.04.2019 and in Pioneer Urban land and Infrastructure Ltd., vs Govindan Raghavan in Civil Appeal no. 12238 of 2018 decided on 02.04.2019, (2019) 5 SCC 725 that a buyer cannot be compelled to take possession of a flat when there is delay in delivery of possession by the builder and the buyer is obliged to refund along with compensation or interest for such delay. The Hon’ble Supreme Court has laid down in in Fortune Infrastructure & Anr. Vs. Trevor D’Lima & Ors., (2018) 5 SCC 442 laid down that a person cannot be made to wait indefinitely for possession of the flat allotted to him and is entitled to seek refund of the amount paid with compensation. It has also held in Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra, Civil Appeal No. 3182 of 2019 decided on 25.03.2019 that a consumer has the right to seek refund in view of the inordinate delay on the part of the opposite party and in Bangalore Development Authority vs. Syndicate Bank, (2007) 6 SCC 711 that when possession of the allotted plot/flat/house is not delivered within the specified time, the allottee is entitled to a refund of the amount paid, with reasonable interest thereon from the date of payment till the date of refund. Reiterating this principle the Hon’ble Supreme Court further laid down that “It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession” in Kolkata West International City Pvt. Ltd. (supra). It was held that the law was well settled that if construction had not been completed and neither an occupation certificate obtained nor possession offered to the consumers, the opposite party could not compel the complainant to accept possession. The complainant allottee was rather entitled to full refund with compensation.

10.    The argument of the learned counsel for the Respondent/opposite party that the delay in the completion of the project was not due to reasons attributable to it, but on account of force majeure factors which were beyond its control and therefore indemnify him has also been considered. The argument that since the project was under the banner of a public private partnership and therefore had inherent difficulties is a bald assertion that is not supported by any evidence on record and cannot be accepted. Even the argument that the respondent was covered by orders of the NCLT under Section 14 of the Insolvency and Bankruptcy Code (IBC) cannot be considered as the order of the NCLT sought to be relied upon by the Respondent relates to a project “Fernhill Gardens” located in Gurgaon and has no relevance to the project on hand. The argument of the Respondent that it is indemnified by force majeure circumstances therefore does not sustain and must be rejected.

12.    The order of the State Commission has directed the Respondent to hand over possession within a stipulated period of time failing which with interest @ 10% p.a. or 15% p.a. in case of further default. In view of the present position of the project and considering that that the Appellant/complainant has waited for over 10 years for possession of the flat which has no prospect of being completed, refund of the amount deposited by the Appellant has been prayed for during arguments with compensation. The same has been considered. The order of the State Commission directing completion of the construction of the flat and its handing over to the Appellants by the Respondents is not found to be a feasible direction given the present status of the project, as admitted by the counsel for the Respondent. Refund of the amounts deposited by the Appellant is the only option which has also been prayed for by the Appellant. Insofar as the compensation for the refund is concerned, the Hon’ble Supreme Court in Experion Developers Pvt. Ltd. Vs. Sushma Ashok Shiroor, C.A. No. 6044 of 2019 decided on 07.04.2022, has held that compensation in cases where refund is directed should be both compensatory and restitutionary and that compensation by way of interest @ 9% is fair and just. As regards the compensation sought by the Appellant for rent paid, it is evident from the material on record that no evidence for the same has been brought on record. The same cannot therefore be considered. It has also been held by the Apex Court in DLF Homes Panchkula Pvt. Ltd., vs D S Dhanda (2020) 16 SCC 318, decided on 10.05.2019 that multiple compensations for a singular act of deficiency is not justified.

13.    In the light of the discussion above, there is merit in the arguments of the Appellant/complainant. The appeal is therefore partly allowed and the order of the State Commission is modified as under:

(i)     Respondent shall refund the amounts deposited with it by the Appellant without any deductions with compensation @ 9% p.a. from the respective dates of deposit within 8 weeks of this order failing which the refund shall be made with interest @ 12% p.a. till realization.

(ii)    Respondent shall also pay litigation cost of Rs 50,000/- to the Appellant along with the refund as directed above.

14.    In view of the discussions in the lead case, First Appeal Nos. 44, 2000 and 2001 of 2018 are also disposed of in the above terms. Pending IAs, if any are also disposed of with this order.