JUSTICE V.K. JAIN, (ORAL)

The complainants in these matters booked residential flats with the OP in a project, namely, ‘Harmony in Uniworld City’, which the opposite party - Bengal Unitech Universal Infrastructure Pvt. Ltd.   was seeking to develop in Kolkata. The following are the particulars of the allotments made to the complainants including the flat numbers allotted to them, the date on which they executed the agreements with the OP, the date by which possession was to be delivered to them, the total sale consideration agreed between the parties and the amount which the complainants paid to the OP:-

2.      The grievance of the complainants in these matters is that despite they having made substantial payment to the OP, the possession of the allotted flat has not even been offered to them. The complainants, therefore, approached this Commission seeking delivery of possession of the allotted flats. They also sought refund of the amount paid by them to the opposite party with compensation etc. in case the opposite party  is not in a position to deliver possession of the allotted flats to them. They also sought reimbursement of the amount which they paid to the opposite party  as Service Tax alongwith interest on that amount.

3.      In CC/195/2017, the possession of the allotted flat was delivered to the complainant during pendency of this complaint on 5.1.2018.

4.      The opposite party  filed written version contesting the consumer complaints but it is an admitted position before me that the complaints have been contested on the grounds which this Commission has already rejected in several other consumer complaints pertaining to this very project.

5.      The learned counsel for the complainants has drawn my attention to the decision of this Commission delivered in CC/2597/2017 - Sanjib Saha Vs. Bengal Unitech Universal Infrastructure Pvt. Ltd. decided on 28.11.2018 as well as CC/621/2015  - Ariji Chatterjee Vs. Bengal Unitech Universal Infrastructure Pvt. Ltd.   decided on 22.3.2017  and the decision of this Commission dated 9.1.2017 in CC/654/2015 – Vikash Arora Vs. Bengal Unitech Universal Infrastructure Pvt. Ltd.    

6.      The decision of this Commission in Vikash Arora (supra) to the extent it is relevant reads as under:-

“3.     The complaint has been resisted by the OP which has inter-alia alleged that the delay in construction is attributable to the delay in obtaining the statutory approvals pertaining to road, electricity, water, sewerage etc. beyond the control of the OP.  It is further alleged that construction is in progress and the OP remains committed to deliver possession of the flats to the complainants. 

4.      The main question which arises for consideration in this complaint is as to whether the construction of the flat agreed to be sold to the complainants has been delayed on account of reasons beyond the control of the OP.  It has been vaguely alleged in the written version that there was delay in obtaining approvals and permissions required for infrastructural work, without disclosing when the approvals and permissions were applied and when they were granted.  The written version of the OP does not show what is the time normally taken for grant of such approvals and permissions and what was the time actually taken in this case.  The reply does not indicate the objections if any taken by the statutory authorities to the applications of the OP seeking the requisite approvals and permissions.  If the delay occurred on account of some defect or deficiency on the part of the OP itself, the statutory authorities cannot be blamed for the said delay.  Moreover, the delay in this case was very substantial, more than five years from the committed date of possession having already expired and the completion of the flat allotted to the complainants nowhere being in sight. 

5.      I also find no merit in the contention that in the event of delay, the complainants are entitled to the agreed compensation @ Rs.5/- per sq. ft. per month for the period of delay, in terms of clause 5.c.(ii) of the Agreement, since the above referred clause in my opinion applies to the cases where the allottee wants possession of the flat alongwith compensation and does not claim refund of the amount paid by him  alongwith compensation.  In any case, clause 5.e of the Agreement itself provides for refund alongwith interest @ 10% per annum in the cases where the developer is unable to deliver the possession of the flat to the buyer.” 

7.      The learned counsel for the complainants has also drawn my attention to the recent order of the Hon’ble Supreme Court dated 2.4.2019 passed in Civil Appeal No.12238 of 2018 – Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan & other connected matter. The aforesaid decision to the extent it is relevant reads as under:-

6.3. The National Commission in the Impugned Order dated 23.10.2018 held that the Clauses relied upon by the Builder were wholly one-sided, unfair and unreasonable, and could not be relied upon.

The Law Commission of India in its 199th  Report, addressed the issue of ‘Unfair (Procedural & Substantive) Terms in Contract’. The Law Commission inter-alia recommended that a legislation be enacted to counter such unfair terms in contracts. In the draft legislation provided in the Report, it was stated that :

“A contract or a term thereof is substantively unfair if such contract or the term thereof is in itself harsh, oppressive or unconscionable to one of the parties.”

6.4. A perusal of the Apartment Buyer’s Agreement dated 08.05.2012 reveals stark incongruities between the remedies available to both the parties.

For instance, Clause 6.4 (ii) of the Agreement entitles the Appellant – Builder to charge Interest @18% p.a. on account of any delay in payment of installments from the Respondent – Flat Purchaser.

Clause 6.4 (iii) of the Agreement entitles the Appellant – Builder to cancel the allotment and terminate the Agreement, if any installment remains in arrears for more than 30 days.

On the other hand, as per Clause 11.5 of the Agreement, if the Appellant – Builder fails to deliver possession of the apartment within the stipulated period, the Respondent – Flat Purchaser has to wait for a period of 12 months after the end of the grace period, before serving a Termination Notice of 90 days on the Appellant – Builder, and even thereafter, the Appellant – Builder gets 90 days to refund only the actual installment paid by the Respondent – Flat Purchaser, after adjusting the taxes paid, interest and penalty on delayed payments. In case of any delay thereafter, the Appellant – Builder is liable to pay Interest @ 9% p.a. only.  

6.5. Another instance is Clause 23.4 of the Agreement which entitles the Appellant – Builder to serve a Termination Notice upon the Respondent – Flat Purchaser for breach of any contractual obligation. If the Respondent – Flat Purchaser fails to rectify the default within 30 days of the Termination Notice, then the Agreement automatically stands cancelled, and the Appellant – Builder has the right to forfeit the entire amount of Earnest Money towards liquidated damages.

On the other hand, as Clause 11.5 (v) of the Agreement, if the Respondent – Flat Purchaser fails to exercise his right of termination within the time limit provided in Clause 11.5, then he shall not be entitled to terminate the Agreement thereafter, and shall be bound by the provisions of the Agreement.

6.6. Section 2 (r) of the Consumer Protection Act, 1986 defines ‘unfair trade practices’ in the following words :

 “‘unfair trade practice’ means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice …”, and includes any of the practices enumerated therein. The provision is illustrative, and not exhaustive.

In Central Inland Water Transport Corporation Limited and Ors. v. Brojo Nath Ganguly and Ors.,4 this Court held that :

 “89. … Our judges are bound by their oath to ‘uphold the Constitution and the laws’. The Constitution was enacted to secure to all the citizens of this country social and economic justice. Article 14 of the Constitution guarantees to all persons equality before the law and equal protection of the laws. This principle is that the courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power. It is difficult to give an exhaustive list of all bargains of this type. No court can visualize the different situations which can arise in the affairs of men. One can only attempt to give some illustrations. For instance, the above principle will apply where the inequality of bargaining power is the result of the great disparity in the economic strength of the contracting parties. It will apply where the inequality is the result of circumstances, whether of the creation of the parties or not. It will apply to situations in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them. It will also apply where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of the contract, however unfair, unreasonable and unconscionable a clause in that contract or form or rules may be. This principle, however, will not apply where the bargaining power of the contracting parties is equal or almost equal. This principle may not apply where both parties are businessmen and the contract is a commercial transaction. …

… These cases can neither be enumerated nor fully illustrated. The court must judge each case on its own facts and circumstances.”

(emphasis supplied)

6.7. A term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder.

The contractual terms of the Agreement dated 08.05.2012 are ex-facie one-sided, unfair, and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2 (r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the Builder.

7. In view of the above discussion, we have no hesitation in holding that the terms of the Apartment Buyer’s Agreement dated 08.05.2012 were wholly one-sided and unfair to the Respondent – Flat Purchaser. The Appellant – Builder could not seek to bind the Respondent with such one-sided contractual terms.”

8.      In view of the above-referred decision of the Hon’ble Supreme Court, it can hardly be disputed that the Clause of the agreement which provides for payment of compensation @ Rs. 5/- per sq.ft. per month for the period of delay is wholly unfair and one-sided and, therefore, will not bind the parties. Moreover, in the present case, Clause 5.e of the Buyers Agreement itself envisages refund with simple interest @ 10% p.a. in case the developer is not in a position to offer apartments or an alternative property. The OP did not offer any alternative property to the complainants at any point of time before these complaints were instituted or even by the time the written version was filed. The learned counsel for the opposite party  has drawn my attention to para 10 of the written version wherein it is interalia alleged that the opposite party  is willing to give an option of swap in the apartment where possession may be made available at an early date with nearly similar specification. It is further stated that the availability of such apartment shall depend on the status of the available apartments on the day confirmation to avail such swap option is made by the complainant. The OP has expressed willingness to assist the complainants  in case he is interested in  availing such swap option. The said averment in the written version in my opinion does not amount to offering an alternative flat to the complainants on a firm basis. If the opposite party wanted to offer an alternative flat to the complainants, it ought to have made a firm offer, offering specific a flat of similar size and specifications at a comparable location in the same project. That, however, has not been done and only a vague offer has been made without any firm commitment to deliver an alternative flat to the complainants in lieu of the flats allotted to them. This is also evident from the statement that the availability of such apartment shall depend upon the status of the available apartment  on the day confirmation to avail the swap option is made by the complainant. In the absence of particulars such as size, location, specifications, and price of the flat which could be made available to the complainants, the said swap option cannot amount to an offer of alternative accommodation within the meaning of Clause 5.e of the Buyers Agreement. The learned counsel for the complainants states on instructions that the complainants are not interested in exploring the swap option given in the written version nor are they interested in seeking possession of the flats allotted to them along with appropriate compensation. The learned counsel for the complainants also states that the complainants are restricting their claim to refund of the principal amount paid to the opposite party along with compensation in the form of simple interest @ 10% p.a. in terms of Clause 5.e of the agreement between the parties.

9.      The possession of the allotted flats was to be delivered to the complainants in the year 2010/2011. They have already waited for more 7-8 years for the possession of the allotted flats. They cannot be compelled to wait any more particularly when there is no firm offer allotting any particular residential apartment  of comparable size, specifications and location to them, at the price at which the residential apartment was made to them in this project. A reference in this regard may be made to the recent decision of the Hon’ble Supreme Court in Civil Appeal No.3182 of 2019 – Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra dated 25.3.2019 where the builder had offered possession of the raw houses to the complainant and it was contended that the developer having  made a substantial investment, a direction for refund was not warranted. Rejecting the contention, it was held by the Hon’ble Supreme Court that since nearly 07 years had elapsed from the date of the agreement and the completion certificate was received nearly 07 years after the extended date for handing over possession, it would be manifestly unfair to nonsuit the buyer who wanted a refund of the amount paid by him to the developer since he can be expected to wait for possession only for a reasonable period.

10.    For the reasons stated hereinabove, the CC Nos.194 of 2017 and  CC/196/2017 to CC/204/2017 are disposed of with the following directions:-

1. The opposite party shall refund the entire amount received from the complainants to them along with compensation in the form of simple interest @ 10% per annum from the date of each payment till the date of refund.

2. The opposite party shall pay Rs.25,000/- as cost of litigation to the complainants in each complaint.

3. In CC/195/2017 where the possession of the apartment has already been delivered to the complainant, the OP shall pay compensation in the form of simple interest @ 8% per annum to the complainant from 1.1.2011 till 4.1.2018, the possession having been delivered on 5.1.2018.

4. The said complainant shall also be entitled to the cost of litigation quantified at Rs.25,000/-.

5. The payment in terms of this order shall be made within three months from today.