The instant complaint under Section 17 (inadvertently mentioned under Section 12) of the Consumer Protection Act, 1986 (for brevity, ‘the Act’) is at the instance of a couple/intending purchasers against the Developer/Builder on the allegation of deficiency in services for non-delivery of an apartment and one covered car parking space in a dispute of housing construction.
In a nutshell, the complainants’ case is that being allured by the advertisement, on 30.12.2007 they have made a formal application to the Opposite Party along with one post dated A/C payee cheque amounting to Rs.5,34,914/- dated 07.01.2008 for hiring the services of residential flat/apartment No.2001 in Tower No.8 along with a covered car parking space in the Complex “Harmony” in Uniworld City to be developed by O.P. on the plot of land situated in main Arterial Road, Action Area-III, New Town, Kolkata – 700156, Dist- North 24 Parganas at a total consideration of Rs.58,34,078.65P. On 14.01.2008 the OP had issued an allotment letter along with payment schedule after receipt of the sum of Rs.5,34,914/-. Subsequently, on 18.01.2008 an Agreement was executed between the parties whereby it was agreed that the complainants will be provided with an apartment measuring about 1893 sq. ft. being Apartment No.2001 on the 19th floor, Tower No.8 along with one covered car parking space on the ground floor in the said complex at a total consideration of Rs.58,34,079/-. On 09.02.2008 the OP had granted permission to the complainants to mortgage the said apartment with HDFC Bank Ltd. As per terms of the Agreement, complainants have paid Rs.55,16,621/- and agreed to pay balance amount of Rs.3,17,458/- upon receiving delivery of possession. As per terms of the agreement, the OP was under obligation to handover the subject apartment within 31.03.2011. After expiry of the committed date of possession, the complainants on several occasions requested the OP to complete the construction and to handover the apartment but without any fruitful result. On 10.01.2014 the complainants through their Ld. Advocate issued a notice upon OP requested them to deliver possession of the flat in habitable condition within 31.01.2014. Having no response, on 14.02.2014 complainants issued another letter through their Advocate demanding compensation by way of refund of Rs.55,16,621/- together with interest for the sum of Rs.49,64,959/- and further interest as indicated in the Agreement. On 17.03.2014 and 07.01.2015 again the complainants through the Advocate demanded delivery of possession along with compensation but all turned a deaf ear. Hence, the complaint with prayer for several reliefs, viz. – (a) to direct the OP to handover delivery of possession of the subject apartment and the car parking space in habitable condition and to execute Deed of Conveyance as per terms of the Agreement; (b) to pay Rs.29,35,390/- as compensation; (c) interest and (d) costs etc.
The Opposite Party by filing a written version has admitted the existence of agreement between the parties in respect of property in question and also admitted the factum of payment of Rs. 55,16,621/- by the complainants but it has been stated that they are ready and willing to complete the project and perform their obligation in terms of the agreement and in this regard they will pay compensation to the purchaser @ Rs. 5 per sq. ft. per month for the period of delay in offering the delivery of the same and the period indicated in the agreement. The OP has stated that on receipt of notice dated 14.02.2014, they had given reply on 20.02.2014 where they disclosed the reason for delay in construction and the status of construction but on 17.03.2014 the complainants again through their Ld. Advocate sent a notice to the Advocate of them and demanded for refund of the amount. Therefore, the complaint should be dismissed.
Both the parties have tendered evidence on affidavit. They have also given reply against questionnaire set forth by their adversaries. At the time of final hearing both the parties have also filed brief notes of arguments in support of their respective cases.
Having heard the Ld. Advocates appearing for the respective parties and on perusal of pleadings and the evidence available on the record, it transpires that on the basis of advertisement published by OP Company, complainants made a formal application on 30.12.2017 to the OP for hiring their services for construction of a residential flat/apartment with a covered car parking space in the complex “Harmony” in Uniworld City to be developed by OP on the plot of land situated in Main Arterial Road, Action Area-III, New Town, Kolkata – 700156 along with one post dated A/C payee cheque amounting to Rs.5,34,914/- bearing No.612076 dated 07.01.2008 drawn on HDFC Bank Ltd. in the name of OP being part consideration of the services hired for construction of the residential apartment. On 14.01.2008 the OP had issued one allotment letter along with payment schedule on receipt of a sum of Rs.5,34,914/-.
Evidently, on 18.01.2008 an Agreement was executed between the complainants and the OP and the OP had agreed to construct and transfer an apartment having super built up area of 1893 sq. ft. being Apartment No.2001 on 19th floor, Tower No.8 along with one covered car parking space on the ground floor in the complex of “Harmony” in Uniworld City to be developed by OP on the plot of land situated in Main Arterial Road, Action Area-III, New Town, Kolkata – 700156 at a total consideration of Rs.58,34,079/-. It remains undisputed that the complainants have already paid Rs.55,16,621/- as part consideration amount towards the said total consideration of Rs.58,34,079/- and agreed to pay the balance amount of Rs.3,17,458/- upon receiving delivery of possession of the said apartment.
As per terms of the Agreement, the OP Company was under obligation to handover the subject flat to the complainants within 31.03.2011. Admittedly, even after expiry of long 8 years after the committed date of possession, the O.P. has failed to deliver the possession. In this regard, O.P. has also failed to advance any Force Majeure circumstances which prevented them to comply with the terms and conditions of the agreement.
It is trite law that the parties are bound by the terms of agreement. When either of the parties did not pick up any quarrel with the terms and conditions of the agreement, they are certainly bound to follow the terms and conditions contained in the agreement. In a case reported in AIR 1996 SC 2508 (Bharti Knitting Co. – vs. – DHL World Wide Express Courier Division of Airfreight Ltd.) the Hon’ble Supreme Court has observed thus:-
“It is seen that when a person signs a document which contains certain contractual terms, as rightly pointed out by Mr. R.F.Nariman, Ld. Senior Counsel, that normally parties are bound by such contract; it is for the party to establish exception in a suit. When a party to the contract disputes the binding nature of the signed document, it is for him to prove the terms in the contract or circumstances in which he came to sign the documents need to be established. The question we need to consider is whether the District Forum or the State Commission or the National Commission could go behind the terms of the contract? It is true, as contended by Mr. M.N.Krishanmani, that in an appropriate case, the Tribunal without trenching upon acute disputed question of facts may decide the validity of the terms of the contract based upon the fact situation and may grant remedy. But each case depends upon it own facts. In an appropriate case where there is an acute dispute of facts necessarily the Tribunal has to refer the parties to original Civil Court established under the CPC or appropriate State law to have the claims decided between the parties. But when there is a specific term in the contract, the parties are bound by the terms in the contract”
Ld. Advocate for the Complainants has submitted that non-delivery of possession within the stipulated period itself amounts to deficiency in services, more particularly, when no Force Majeure circumstances has been advanced by the O.P. He has further submitted that the amount of compensation for the delay as mentioned in clause 5.c.ii of the agreement which provides compensation of Rs. 5/- per sq. ft. per month for the delay in offering delivery of the said apartment is much less than the amount of 18% claimed by the O.P. in case of delay in payment of instalments within time. Placing reliance to a judgement/final order of the Hon’ble National Commission in CC/1046/2015 [Vikas Kaul & Anr. – Vs. – M/s. Unitech Ltd.] he has submitted that considering the abnormal delay on the part of OP in completing the construction and in ability to offer possession as on today, the complainants cannot be compelled to accept the possession whenever it is offered by OP and the complainants are legally entitled to seek refund of money which they have paid to OP along with appropriate compensation. He has also placed reliance to a judgement of the Hon’ble National Commission in CC/398/2015 [Sipra Thomas –Vs. – Bengal Unitech Universal Infrastructure Pvt. Ltd.] and claimed refund of the amount along with interest 18% p.a.
On the other hand, Ld. Advocate for the O.P. has contended that due to delay in payment of instalments by the consumers, the developer/builder is facing difficulties in constructing the project. However, referring Clause-2.f of the Agreement Ld. Advocate for OP submitted that the OP Company has the authority to cancel the agreement in the event of allottees fails to pay any instalment with interest within 90 days from the due date. Referring to Clause 5.c.ii of the Agreement, Ld. Advocate for OP Company submits that there is no deficiency on the part of OP as the OP agreed to pay the interest on account of delay in delivery of possession. Clause 5.c.ii of the Agreement is reproduces below : -
“That the Developer would pay to the Purchaser compensation @ Rs. 5/- per sq. ft. per month for the period of delay in offering the delivery of the said Apartment beyond the period indicated in clause 5.a.(i), save and except for reasons beyond the reasonable control of the Developer and the Force Majeure events specified in this Agreement. These charges would be adjusted at the time of final notice of possession. The Developer will not be under any other liability to pay damages or any other compensation to the purchaser.”
On reading of clause 5.c.ii, it appears that this clause is applicable only in cases where the Opposite Party fails to deliver possession of the apartment within the stipulated time and the compensation is to be paid every month for the delay.
In our case, for ascertaining the actual state of affairs, it would be proper to have a look to the reply given by OP Company against the questionnaire set forth by complainants. In Question No.3, it was put by the complainants – ‘whether at the time of issuing at the time of allotment of letter on 14th January, 2008 did the project receipt environmental clearance from Pollution Authority and Environment Impact Assessment Authorities?’ to which it was replied – ‘we have received Environment clearance on 17th February, 2009’. In another question – ‘whether at the time of issuing the allotment letter on 14th January, 2008, the Uniworld City-Harmony, Tower – 8 had a sanctioned plan?’ to which it was replied – ‘we have received the construction permission on 11th November, 2009’.
From the statement of OP, it appears that at the time of entering into agreement with complainants, OP had no sanctioned plan for the project. In a decision reported in III (2007) CPJ 7 [Kamal Sood – Vs. – D.L.F. Universal Ltd.] the Hon’ble National Commission relied on the judgement of Hon’ble Supreme Court reported in II (2000) CPJ 1 [Ghaziabad Development Authority – Vs. – Union of India] had observed that it is unfair trade practice on the part of developer/builder to collect money from prospective buyers without obtaining the required permissions such as Zoning Plan, Lay Out Plan etc. It is the duty of the builder to obtain the requisite permission or sanctions, in the first instance and, thereafter, recover the consideration money from the purchaser. Admittedly, the OP did not obtain requisite permission at the time of issuance of allotment letter on 14.01.2008 on the date of agreement on 18.01.2008. This act on the part of OP not only construes deficiency in service but also falls under unfair trade practice, as defined under Section 2(1)(r) of the Act.
Having heard the Ld. Advocates appearing for the parties when it stands proved that despite of having received more than 95 % of the consideration amount, the O.P. has failed to deliver possession of the said apartment to the complainants and further advanced no explanation for failure to comply with the stipulation of delivery of possession, I have no hesitation to hold that the Opposite Party has committed deficiency in services and also has indulged in unfair trade practice. It remains undisputed that the O.P. has failed to deliver possession of the apartment even after 8 years after the expiry of committed date of possession. Thus, in my view, this is a case of O.P. not being in a position to offer possession of the apartment as an allottee cannot be expected to wait for possession of the apartment for an indefinite period. In that perspective, any order for a direction upon the OP to deliver possession or to execute the Deed of Conveyance on receipt of balance consideration amount will be a futile attempt. Therefore, the justice of the case would be sub served by passing an order for refund of money which already been paid by the complainants to the OP for hiring their services. Accordingly, the complainants are entitled to refund of Rs.55,16,621/-.
For the purpose of adjudication on the point of compensation, in our case, it would be relevant to regard Clause 5.e which provides alternative property/compensation. The said clause reproduces –
“That if for any reason the Developer is not in a position to offer the Apartment herein applied for allotment, the Developer shall offer the Purchaser an alternative property or refund the amount in full with simple interest @ 10% per annum without any further liability to pay any damages or compensation.”
On perusal of the above, it is quite clear that if for any reason, the O.P. is not in a position to offer possession of the apartment as an alternative relief, the O.P. shall refund the amount of Rs. 55,16,621/- along with compensation in the form of simple interest @ 10% p.a. without any further liability.
Therefore, in view of the above clause, the O.P. is liable to pay simple interest @ 10% on the deposited amount as compensation for their default in paying respect to the terms of agreement between the parties.
Considering the facts and circumstances of the case, the complaint is disposed of with the following directions:
- The Opposite Party shall refund the entire amount of Rs. 55,16,621/- received from the complainants along with compensation in the form of simple interest @10% per annum from the date of each payment till the date on which the entire amount along with compensation in terms of this order is paid;
- The Opposite Party shall pay Rs.10,000/- as costs of litigation to the complainants;
- The payment in terms of this order shall be made within 60 days from date.
