Dr. SADHNA SHANKER, MEMBER

1.       The present appeal has been filed under Section 19 of the Consumer Protection Act, 1986 (for short “the Act”) in challenge to the order dated 31.07.2019 passed by the State Consumer Dispute Redressal Commission, Maharashtra (hereinafter referred to as the “State Commission”) in Complaint No. 557 of 2015 whereby the complaint was partly allowed.

2.       We have heard the learned counsel for the appellants (hereinafter referred to as the ‘builder’) and the learned counsel for the respondent (hereinafter referred to as the ‘complainant’) and have perused the record including inter alia the impugned order dated 31.07.2019 and the memorandum of appeal.

3.       The facts, in brief, are that the complainant purchased a flat bearing No. 304, admeasuring 870 sq.ft. carpet area, on the 3rd Floor of the building No.18 of Hill View in the Prestige Residency Complex for a total consideration of Rs.58,78,485/-  from the builder and the builder had executed an agreement on 17.12.2012 in favour of complainant. It is alleged that as per agreement, possession of the flat was to be given on or before December, 2014. The builder, vide its letter dated 09.01.2013, demanded an amount of Rs.2,85,651/- towards amount of construction of seventh slab along with service tax and VAT. Accordingly, the complainant deposited that amount with the builder vide cheque on 25.01.2013 and obtained receipt thereof. It is alleged that the builder failed to handover possession of flat to the complainant within the stipulated period. The complainant further alleged that in January 2015 the builder demanded additional amount at the rate of Rs.1,500/- per sq.ft. for getting possession of flat and threatened the complainant to unilaterally terminate the agreement in case the said amount is not paid. As per letter dated 06.02.2015, the builder informed complainant that they are not in a position to complete the construction in time for want of sanctions and approvals from Corporation. It is also alleged that the builder informed the complainant that they are not in a position to handover possession of flat to complainant unless escalation price of flat is paid by her.

4.       Being aggrieved, the complainant filed a complaint before the State Commission with the following prayer:

 a. This Hon'ble Forum be pleased to direct the Complainant to complete the finishing work with all amenities as per the Agreement and handover to the Complainant flat No.304 on the 3rd Floor admeasuring 870 sq. ft. and 80.82 sq. mtrs. carpet area in building No.18, Hill View in Prestige Residency Complex, Kavesar situated at Waghbil Naka, Kavesar, Thane.

b.   The Opposite Parties be directed pay Rs.9,12,000/- (towards mental harassment Rs.5,00,000/-, compensation @ 18% p.a on the amount paid as on December 2014 till today Rs.3,08,000/- and towards legal expenses Rs.1,04,000/- to the Complainant and further compensation @ 18% p.a on the amount paid to the complaint till handing over of possession of the said flat to the Complainant.

c.   In the alternative the Opposite Parties be directed to give an ownership flat in the same project after giving options to the Complainant and as per final choice of the Complainant by necessary deed of corrections to the original agreement dated 17/12/2012.

d.   Pending the hearing and final disposal of this complaint the Opposite Parties themselves, their employees, agents, representatives be restrained by the order of this Hon'ble Commission from creating third party interest in flat no.304 on 3rd floor, in building No.18, Hill View, Prestige Residency Complex, Kavesar situated at Waghbil Naka, Kavesar, Thane.

5.       After appreciation of the facts of the case, the State Commission vide Order dated 31.07.2019, partly allowed the complaint with following directions:

(ii). Opponents are hereby directed to handover possession of Flat No. 304 on the 3^rd Floor admeasuring 870sq.ft. situated in building no. 18, Hill View in Prestige Residency Complex, Kavesar situated at Waghbil Naka, Kavesar, Thane to complainant within a period of three months from passing of this order on receipt of balance amount of consideration as per agreement date i.e. 17.12.2012 from complainant.

Complainant is at liberty to deposit balance amount of consideration with this Commission under intimation to opponents.

OR

Alternatively at the choice of complainant opponents are at liberty to give possession of any other flat of same size for the same price in the vicinity after accepting balance consideration from complainant.

Complainant is at liberty to deposit balance amount of consideration with this Commission under intimation to opponents.

(iii) Opponents are also hereby directed to pay interest on amount deposited by complainant with them of Rs.29,35,243/-  at the rate of 9% per annum from December, 2014 till getting actual possession of flat from opponents.

(iv) Opponents are further directed to pay compensation of Rs.1,00,000/- for mental pain and agony and Rs.10,000/- towards costs of litigation to complainant.

(v) Opponents are directed to pay amount of costs and compensation to complainant within a period of one month from the date of passing of this order otherwise they will have to pay interest on that amount at the rate of 9% per annum from the date of passing of this order till realization of amount by complainant.

6.       Being aggrieved by this Order, the builder has filed the present appeal before this Commission with the following prayer:-

(i)     the appeal be admitted.

(ii)    Pending the hearing and final disposal of the present appeal, the impugned order dated 31.07.2019 of the State Commission, Mumbai in Consumer complaint no. 557 of 2015 be stayed.

(iii)   After hearing the parties, the impugned order dated 31/07/2019 passed by the State Commission, Mumbai in Complaint No. 557/2015, be quashed and set aside and the present appeal be allowed in the interest of justice by dismissing the complaint filed by the complainant.

(iv)   Costs of this appeal be awarded.

(v)    Any other relief/s which this Hon’ble Commission may deem, fit and proper be granted in favour of the Appellants in the interest of justice.

7.       Before this Commission, the counsel for the builder argued that in the year 2010, the TMC had granted initial sanctions and the complainant at that time was fully aware that the builder is awaiting sanctions for further floors and in these circumstances the clause 21 of the registered Agreement came to be incorporated as agreed by both the parties. Eventually, the work came to be stalled for 30 months between the years 2011-2014 on account of apathy and inefficiency shown by the municipal corporation. Needless to say, with a huge gap of nearly 4 years, costs of construction of the building, including labour construction material skyrocketed with regards to the prices compared to the prices prior to 2011.

8.       It is further argued that there is no consumer dispute between the parties. The complainant is an investor and the same is evident from the record and overall conduct of the complainant. The pleadings and evidence filed by the complainant also do not mention the purpose of the flat booking made by the complainant. It was further argued that the builder has been offering possession to the complainant, however, the complainant on one or the other false pretext has not come forward to take possession of the flat in question.

9.       Further, it was argued that the State Commission has directed the builder to hand over possession on receipt of the balance consideration amount from the complainant and the complainant was also given the liberty to deposit the balance consideration amount with the State Commission under intimation to the builder in order to receive possession of the flat. However, instead of the direction from the State Commission, the complainant has come forward to accept the possession of the flat and the complainant is unnecessarily delaying the same under one false pretext or another. It is also not known if she has deposited the balance consideration with the State Commission and no intimation regarding the same has been given to the builder in compliance of the order dated 31.07.2019 of the State Commission. Thus, it becomes crystal clear that the complainant is not interested in the flat and is only interested in making monetary gains.

10.   Further, it was argued that complaint filed by the complainant was not maintainable on the point of pecuniary jurisdiction. The complainant has simpliciter prayed for an alternate flat, the value of which the complainant himself claims to be Rs.1.6 crore. Thus, the complaint is liable to be dismissed on the ground of lack of pecuniary jurisdiction.

11.     Further, it was argued that the value of the flat has now gone up beyond 1.6 crore. The record shows that the complainant is aware that she is benefitted from the transaction and she has therefore not made any specific pleadings regarding any loss and has further not made any specific recital regarding any loss or compensation in the affidavit of evidence filed by her before the Hon'ble State Commission. The evidence given by the builder has gone unrebutted and it is proved on record that the complainant has not suffered any loss and that she is not entitled to any compensation.

12.     Further, it was argued that the State Commission has, in any case, mechanically awarded compensation under different heads and such award under various heads is not sustainable and the same liable to be set aside. It was further argued that the State Commission has further erred in awarding interest on delayed possession at the rate of 9% which is on the higher side and the same is liable to be set aside.

13.     Further, it was argued that the complainant is fully aware that she was unable to come forward and make the requisite payments on time like the remaining 95-98% of the flat purchasers who have cooperated with the builder and are now in possession of their respective flats. As such, the complainant is not entitled to any reliefs as prayed for by her and the complainant is guilty of creating & engineering the present circumstances in order to suit her own financial situation. The complainant is responsible for creating circumstances providing her ample time and opportunity to maximize her investment motive. Grant of the reliefs in favour of the complainant is therefore not tenable and in the circumstances amounts to unjust enrichment of the complainant. In support of his above contentions, the builder placed reliance on the following judgments:

a.   ICICI Lombard General Insurance Company Ltd, Vs Neema Saini FA/746/2021 decided on 26^th DeCember, 2022 (NCDRC)

b.   Roshni Khana & Anr. Vs M/s Shipra Estate Ltd. & Ors. CC No.  844/2016 decided on 29^th May,2023

c.   Sanjay Sachdeva Vs. Emaar MGF Land Ld. & Anr. CC No. 431 of 2016 decided on 22^nd August,2023

d.    Sudershan Kumar Bhayana Vs. Vinod Seth FAO (OS) 132/2019   decided on 27^th Setember,2023

e.   Phool Patti & Anr. Vs. Ram Singh (Dead) through Lrs. & Anr. Civil Appeal No. 1240 of 2005 decided on 9^th October, 2014

14.     The learned counsel for the complainant reiterated the facts of the case and argued that as per the registered agreement dated 17.12.2019 the builder had to hand over the possession of the flat to the complainant on or before December 2014. However, the possession was not handed over within the stipulated period as the construction work was held up for 30 months. It is pertinent to mention here that the builder had failed to get necessary sanctions and approvals from municipal corporations and hence, the possession could not be handed over within the promised period. It is further argued that if the builder did not have the necessary approvals and sanctions for carrying out the construction, then why it had executed agreement in respect of the flat in favour of complainant and accepted sale consideration. He further argued that if the builders started the construction without necessary approvals and sanctions, which caused delay in delivering possession, it amounts to deficiency in service on part of builder.

15.     Further, it was argued that the complainant kept making payments as per the demand letters issued by the builder from time to time as per the registered agreement but till the filing of the complaint before the State Commission and after passing of the impugned order dated 31.07.2019 by the State Commission, the builder has not given possession of the flat. He further argued that as per the directions of the impugned order, the complainant had to deposit the remaining balance amount to the builder as per the agreement dated 17.12.2012 in order to obtain possession of the said flat. However, inspite of depositing the balance amount of Rs 5,59,391/- Vide D.D No 328367, dated 20.09.2019 deposited on 21/09/2019 before the Hon'ble State Commission in pursuance of clause (ii) of the operative order passed by Hon'ble State Commission, the complainant has not been handed over possession of the flat.

16.     Further, it is argued that that the present appeal is not sustainable in view of the fact that the builder by way of the captioned appeal are seeking exorbitant escalation cost without any justification. Such a cost is contrary to the terms and conditions agreed upon between the parties as per registered agreement to sale dated 17.12.2012 for the purchase of the said flat for a total consideration of Rs.58,70,485/-. He further argued that the builder is now trying to extort money out of the complainant in form of illegal escalation cost of Rs.1500/- per sq ft. (in cash), which turns out to be Rs.47,87,742/- extra, for getting possession of the flat. The illegal escalation cost of Rs. 1500/- per sq. ft. is in violation of the of the registered agreement dated 17.12.2015 and the builder has also not filed any documentary evidence on record to prove such escalation in cost of construction.  Construction without obtaining sanctions and approvals from the corporations and thus demand of escalated price of sale consideration cannot be accepted. In support of their above contention, they placed reliance on Mr. D.S Ranganadh V. M/s Prescon Realtors & Infrastructures Pvt Ltd and Anr., CC/15/862, dated 11.01.2019

17.     Further, it was submitted that there is neither any provision in Maharasthra Ownership Flats (Regulatioin of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 (in short, ‘MOFA’) nor in the agreement for claiming escalation cost. Further, Sec. 7 of MOFA states that after plans and specifications are disclosed no alterations or additions in flat or building shall be carried out without obtaining consent of flat purchasers. It is submitted that the complainant has never demanded refund of the deposited amount and therefore, the builder cannot compel for refund of money  with simple interest at the rate of 9% per annum, nor can they cancel the agreement unilaterally for their own faults and misrepresentations.

18.     It is further argued that the complainant is a home buyer and had purchased the flat for residential purpose and falls within the definition of ‘consumer’ as definition under Section 2(1)(d) of the Act.  It is specifically denied that the complainant by any remotest of possibilities is an investor looking to make capital gains.

19.     The question which falls for our consideration is whether there is deficiency in service on the part of the builder.

20.     It is seen from the facts and upon perusal of evidences on record that the total sale consideration of the flat was Rs.58,78,485/-  and complainant paid Rs.29,35,243/- in total before and after the execution of agreement and as per the agreement, possession was to be given on or before December 2014 but till date the possession has not been handed over to the complainant. The first issue raised by the builder is that the complainant is not a consumer, but an investor. However, no evidence has been placed on record in support of his contention. Builder’s assertion that the complainant is not a consumer within the scope of this Act lacks substantiation as the burden of proof rests on the builder and there is no evidence on record supporting this claim. In view of this Commission’s judgment in Kavita Ahuja Vs. Shipra Estate Ltd. and Jaikrishan Estate Developers Pvt. Ltd. and Ors., I (2016) CPJ 31 (NC) the onus of proof to prove the same lies upon the builder which has not been discharged.

Therefore, in absence of any evidence, this contention of the builder is rejected.

21.  Second issue raised by the builder is with regard to the pecuniary jurisdiction and it is contented by the builder that the application was not considered by the State Commission. However, it is seen that as per the complaint the main prayer is for the possession of the flat costing Rs.58,78,485/- and with the compensation asked for falls well within the pecuniary jurisdiction of the State Commission. Hence, this issue of pecuniary jurisdiction of the builder cannot be sustained.

22.   It is contented by the builder that delay in handing over of possession was caused due to escalation in price of raw materials over the time due to which they are unable to hand over the possession of the flat for the agreed amount. It is an admitted fact that the builder executed the agreement without obtaining proper sanctions and approvals from the authorities and accepted the amount from the complainant. This led to a delay as the necessary sanctions took time. It is the responsibility of the builder to take necessary approvals and sanctions within time and not of the complainant.  Escalations, if any, is on account of this delay. However, for the alleged escalation, no evidence has been placed on record by the builder. Therefore, the contention of builder is rejected and they are not entitled to claim any escalated price for the flat. Further, it is seen that the complainant deposited Rs.5,59,391/- in the State Commission on 20.09.2019 in compliance of the order of the State Commission, however, the possession of the flat in question was not handed over.

23.     In view of the above, we are of the opinion that builder had not handed over the possession of the flat in question till date even after receiving almost 50% of the sale consideration of the flat. It is seen that they received the occupation certificate in 2017 i.e. after the expiry of 3 years from the promised date of delivery. This act of the builder constitutes deficiency in service on its part.

24.   The Hon’ble Supreme Court in the case of DLF Homes Panchkula Pvt. Ltd. vs. D.S. Dhanda, in CA Nos. 4910-4941 of 2019 decided on 10.05.2019 has held that multiple compensations for singular deficiency is not justifiable. Therefore, the award of compensation of Rs.1,00,000/- granted by the State Commission is found to be not tenable.

25.     In view of the above, the order dated 31.07.2019 of the State Commission is modified as under:

a. the complainant is directed to deposit the balance amount as per the agreement of the sale price of the flat to the builders, if not done, within the next six weeks.

b. the builder is directed to handover the possession of the flat in question to the complainant complete in all respects within two weeks thereafter.

c. the builder shall pay delay compensation in the form of interest at the rate of 6% p.a. on the amount deposited from the promised date of handing over possession of the flat in question till the date of handing over of the possession of the flat, within period of six weeks of this Order, failing which, the rate of interest shall be enhanced to 9% p.a.

d. The builder is directed to pay Rs.25,000/- as cost of litigation.

e. the compensation of Rs.1,00,000/- awarded by the State Commission towards mental agony is set aside.

26. .     The appeal is disposed of. Pending application, if any, stands disposed of.