Chandigarh

StateCommission

CC/119/2020

Krishan Kumar - Complainant(s)

Versus

DLf Homes Panchkula Pvt. Ltd. - Opp.Party(s)

Sandeep Malik Adv.

28 Feb 2022

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

                        UNION TERRITORY, CHANDIGARH

 

 

Consumer Complaint  No.	119 of 2020
Date of Institution	03.07.2020
Date of Decision	28.02.2022

 

Krishan Kumar R/o VPO Khatkar District Jind (Haryana).

…Complainant

Versus

 

1. DLF Homes Panchkula Private Ltd., SCO No.190-191-192, Sector 8-C, Chandigarh – UT, Pin - 160009 through its Manager/Authorised Signatory/Officer- in- charge /Director  Sales & Marketing.
2. DLF Homes Panchkula Private Limited, Registered Office, DLF Gateway Tower, Second Floor, DLF City, Phase III, Gurgaon – 122002, Haryana, India through its Manager/Authorized Signatory/Officer-in-Charge/Director Sales and Marketing.
3. Kulbir Singh resident of H.No.3606, Urban State, Jind.

                                                                             …..Opposite Parties.

BEFORE:    JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

                   MRS. PADMA PANDEY, MEMBER

                   MR. RAJESH K. ARYA, MEMBER

 

Present through video conferencing:    

 

For the complainant       : Sh.Sandeep Malik, Advocate

For the Opposite Parties : Sh.Kunal Dawar, Advocate

 

PER PADMA PANDEY, MEMBER

              In brief, the facts of the case, are that Opposite Party No.3 – Sh.Kulbir Singh booked a floor in the project of the Opposite Parties, namely, “The DLF Valley” situated in Sector 3, Kalka – Pinjore Urban Complex, Panchkula by paying booking amount of Rs.4 lakhs on 26.03.2010. Opposite Party No.1 allotted a residential floor No.D2/18 SF in the name of Opposite Party No.3 and thereafter, Buyer’s Agreement was executed between the Company and Opposite Party No.3 on 20.12.2010 (Annexure C-1). The Company transferred the aforesaid Agreement in favour of the complainant vide endorsement dated 10.05.2013 (Annexure C-2). It was further stated that Opposite Party No.1 offered physical possession of the said unit vide letter dated 15.11.2016 and asked the complainant to deposit the amount of Rs.18,04,560.37 and Rs.91,963/-. The complainant visited the site of Opposite Parties No.1 & 2 several times after 15.11.2016 (Annexure C-5) and found that the unit was not complete in all respects and snag list dated 20.03.2018 in this respect was prepared. The complainant deposited Rs.10 lakhs to Opposite Parties No.1 & 2 on 05.07.2019 and visited the site and found that no work was done by them and floor was not ready for possession and in this regard the complainant also placed on record some pictures (Annexure C-7). As per Clause 11(a) of the Agreement, possession was to be delivered to the complainant within a period of 24 months from the date of execution of Agreement but despite repeated requests, the Opposite Parties failed to deliver possession complete in all respects to the complainant. As per Clause 15 of the Agreement, if any delay happens beyond 24 months then Opposite Parties No.1 & 2 shall pay compensation @Rs.10/- per sq. ft. per month of the saleable area for such delay but the Opposite Parties No.1 & 2 failed to grant any compensation. It was further stated that Opposite Parties No.1 & 2 vide Final Statement of Account issued on 15.11.2016 demanded Rs.3,71,850/- for increase in area of 200 sq. ft. from 1550 sq. ft. to 1750 sq. ft. Opposite Parties No.1 & 2 also demanded an amount of Rs.1,55,221/- for delayed interest, which is arbitrary and illegal. It was further stated that despite receipt of 85% of the amount, still the possession was not given and no compensation paid to the complainant. It was further stated that the aforesaid acts, on the part of DLF Homes Panchkula Private Limited, amounted to deficiency, in rendering service, and indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under the Consumer Protection Act (in short the ‘Act’ only), was filed.

2.            Opposite Parties in their written statement took up certain preliminary objections, inter alia, that the complainant, being investor, had purchased the unit  from original allottee for earning profits, as such, he would not fall within the definition of a consumer ; that in the face of existence of arbitration clause in the agreement this consumer complaint is not maintainable; that this Commission did not vest with territorial jurisdiction; that the complaint filed is beyond limitation as possession of the unit in question had been delivered as far as back vide letter dated 15.11.2016.

              On merits, it was admitted that the complainant purchased the unit, in question, from the original allottee. It was stated that the complainant is a subsequent allottee as he purchased the said property from one Kulbir Singh and got the said property transferred in his name on 10.05.2013 vide endorsement (Annexure C-2). It was further stated that as per clause 11(a) of the Agreement, the Company endeavoured to complete the construction of the said project within 24 months unless there was delay due to a force majeure condition or due to reasons mentioned in 11(b) and 11(c) of the Agreement. It was further stated that there was a stay on construction in furtherance to the direction passed by the Hon’ble Supreme Court vide order dated 19.04.2012 in SLP No. 21786-88/2010. In view of the aforesaid order passed by the Hon’ble Supreme Court, the construction activities at the project site had to be put in abeyance and no further activity was carried out. It was further stated that due to the said stay passed by the Court, the work force, which was paid on a daily basis, migrated to other places. Subsequently, upon the order dated 12.12.2012 passed by the Hon’ble Supreme Court vacating the stay granted and dismissed the Special Leave Petition, the construction activity on the project of the Opposite Party could be resumed. However, there was considerable difficulty for the Opposite Parties to gather the work force and to resume the construction activity in the said project, as such, it took several months for gathering the requisite work force. Therefore, the delay in handing over possession was a result of force majeure conditions, as covered in the Agreement executed between the parties. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor they indulged into any unfair trade practice. The remaining averments, were denied, being wrong.

3.                 The Parties led evidence, in support of their case.

4.                We have heard the Counsel for the parties, and have gone through the evidence and record of the case, carefully.

5.                At the outset, it is imperative to add here that since almost all the preliminary objections taken by the Opposite Parties in their written statement i.e. with regard to the complainant not being a “Consumer”, arbitration clause, territorial jurisdiction and complaint is barred by limitation have already been set at rest earlier by this Commission in catena of judgments,  therefore, the same do not require to be dealt again.

6.                The first question that falls for consideration before us is as to whether Opposite Parties No.1 & 2 (DLF Homes Panchkula Pvt. Ltd.) had given timely possession of the unit, in question, to the complainant complete in all respects or not. The answer, to this, question is in the negative.  There is no dispute with regard to the fact that on 26.03.2010, the previous owner i.e. Sh.Kulbir Singh booked the unit in question in the project of Opposite Parties No.1 & 2. Thereafter, the complainant purchased the said unit, which was transferred in the name of the complainant vide endorsement dated 10.05.2013 (Annexure C-2). According to the complainant, he paid 85% of the amount i.e. Rs.34,69,825/- approx. and, possession whereof was required to be delivered within a period of 24 months from the date of execution thereof i.e. latest by 20.12.2012 as per clause 11 (a) of the Agreement dated  20.12.2010. It is also not in dispute that Opposite Parties No.1 & 2 miserably failed to offer possession of the said unit by the promised date and it was offered after a long delay of more than four years vide letter dated 15.11.2016, Annexure C-5.  According to the complainant, it is only paper possession and not more than that because the complainant visited several times at the project site after 15.11.2016 but the said unit was found far from ready for possession and the said fact was brought to the knowledge of the officials of Opposite Parties No.1 & 2 and a snag list of deficiencies (Annexure C-6) was given to them. Even after few months, the complainant again visited the site but found that all the snags in the floor are pending and Opposite Parties No.1 & 2 have not opened the door of the unit. The complainant also placed on record some pictures of the said incomplete floor dated 05.07.2019 (Annexure C-7), which shows the condition of the floor. However, no action was taken to remove the defected wooden floor, water taps or to reinstall the floor tiles of the living room till date. Thus, we are of the considered opinion that the complainant was not the obligation to take over the said possession, even if it is assumed for the sake of arguments that the same was genuine/complete in all respects. Our view is supported by the principle of law laid down by the Hon’ble Supreme Court of India in Civil Appeal No.12238 of 2018 (Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan), decided on 02.04.2019, wherein it was held as under:-

“9. We see no illegality in the Impugned Order dated 23.10.2018 passed by the National Commission. The Appellant – Builder failed to fulfill his contractual obligation of obtaining the Occupancy Certificate and offering possession of the flat to the Respondent – Purchaser within the time stipulated in the Agreement, or within a reasonable time thereafter. The Respondent – Flat Purchaser could not be compelled to take possession of the flat, even though it was offered almost 2 years after the grace period under the Agreement expired…….”

Similar view had been taken by the Hon’ble National Commission in M/s. Emaar MGF Land Ltd. & Anr. Vs. Dr.Manuj Chhabra, First Appeal No.1028 of 2015, decided on 19.04.2016, as under:-

“I am of the prima facie view that even if the said offer was genuine, yet, the complainants was not obliged to accept such an offer, made after a lapse of more than two years of committed date of delivery”.

 

Furthermore, in another case titled as Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No. 70 of 2015, decided on 14 Sep 2016, similar view was reiterated by the Hon’ble National Commission, as under:-

“I am in agreement with the learned senior counsel for the complainants that considering the default on the part of opposite parties no.1 and 2 in performing its contractual obligation, the complainants cannot be compelled to accept the offer of possession at this belated stage and therefore, is entitled to refund the entire amount paid by him along with reasonable compensation, in the form of interest.”

 

                   In the present case, even if we assume for the sake of arguments that possession complete in all respects is given to the complainant on 15.11.2016, then there is a delay of more than  4 years in offering possession of the unit in question. Not only this, perusal of the zimini order dated 18.01.2022 shows that possession of the unit, in question, has been received by the complainant on 17.01.2022 i.e. more than a delay of nine years. Copy of possession letter dated 17.01.2022 and acceptance from the allottee (complainant) also placed on record by Counsel for the Opposite Parties. As such, in view of settled law that non-delivery of possession of unit in a developed project by the promised date is a material violation on the part of a builder.

                   However, to wriggle out of the situation, the Opposite Parties through their  Advisor (Legal) have taken a plea that delay in possession took place on account of the force majeure circumstances having been faced by them which were beyond their control i.e. there was stay on construction activities by the Hon’ble Supreme Court, for the period from 19.04.2012 to 12.12.2012 and after vacation thereof, it took several months to arrange/recall the labourers/masons to restart work at the project site; and also that there was delay on the part of the competent authorities to grant statutory approvals. We do not agree with the plea taken for the reasons to be recorded hereinafter.

7.                First coming to the stay aforesaid, it is true that in some litigation, the Hon’ble Supreme Court of India stayed construction activities and order passed remained in force from 19.04.2012 up-to 12.12.2012 i.e. for about 8 months. In the present case, Agreement was executed between the parties on 20.12.2010 and  as per clause 11 (a) thereof possession of the unit in question was to be delivered within a period of 24 months i.e. latest by 20.12.2012. Under above circumstances, if we add 8 months more on account of suspension of construction activities for the said period, in view of stay aforesaid, and also over and above that 8 months, we give more 4 months of grace period which might have consumed for arranging/recalling the labourers/mason for work i.e. total 12 months over and above 24 months aforesaid, to Opposite  Parties No.1 & 2. Opposite Parties No.1 & 2 even then should have offered possession to the complainant latest by 20.12.2013 but it has not been done so and the same was offered on 15.11.2016, which was also a paper possession. No justification, whatsoever, for delay in offering possession beyond 20.12.2013, has been given by the Builder/Opposite Parties No.1 & 2.

8.                Coming to the question, as to whether, there was any increase in the area of the unit in question as claimed by Opposite Parties No.1 & 2 or not, it may be stated here that to prove their stand, Opposite Parties No.1 & 2 were required to place on record some cogent and convincing evidence in that regard. However, to strengthen their case, Counsel for the Opposite Parties has placed reliance on Occupation Certificate dated 19.07.2016 (Annexure R-2 colly.). It is pertinent to mention here that we have minutely gone through the contents of the said Occupation Certificate and find that it has been issued by the Senior Town Planner-cum-Chairman, Building Composition Committee, Panchkula, for an area measuring 126.231 square meters i.e. 1358.73 square feet only. Other than this document (occupation certificate), there is no other reliable/over-riding document wherefrom, the final area of the unit could be ascertained. In this occupation certificate, it has been clearly mentioned that this certificate will stand automatically cancelled, if the permitted use of building or part thereof is changed or any additional construction or alteration in the said building is raised without approval of the competent authority or the portion of the building for which occupation certificate has not been granted is occupied. Thus, from this Occupation Certificate, it transpired that in fact there has been a permission for only 1358.73 sq. ft. and there is a decrease of 392.27 sq. ft. from the actual area of 1751 square feet (1751 square feet minus (-) 1358.73 square feet). It was further made clear in the said Occupation Certificate that the allottee is not entitled to carry out any additional construction or alteration over and above the area of the unit (1358.73 square feet in the present case) approved vide the said certificate. It is therefore held that the actual area of the unit sold to the complainant, as assessed by the competent authorities, in the said occupation certificate is 1358.73 square feet and not 1751 square feet, as alleged by the Opposite Parties and, as such, the complainant is not liable to make payment, over and above, the area of 1358.73 square feet of the relocated unit.

                   Even otherwise, in our considered opinion, once the original plan is approved by the competent authority, the areas of residential unit as well as of the common spaces and super area cannot change until there is change in either the area of the unit or in the area of any of the common spaces or the total area of the project (plot area) is changed.  To prove that there was actually an increase in the area of the unit, the company was required to provide a comparison of the areas of the original approved common spaces and the flats with finally approved common spaces/buildings and the flats and also the said fact was also required to be mentioned in the final occupation certificate issued by the competent authorities, before offering possession of the unit, which they failed to do so. It has been observed by this Commission that it has become a common practice of the builders/developers, just with a view to  extract extra money from the gullible allottees at the stage, when they cannot quit the deal, as their substantial amount is locked with the company and they are about to take possession. This inaction on the part of Opposite Parties No.1 & 2 needs to be deprecated. A similar question, as to whether, the builder can charge for excess area, without giving any justification in that regard, fell for determination before the Hon’ble National Commission in Pawan Gupta vs Experion Developers Pvt. Ltd., consumer complaint bearing no.286 of 2018, decided on 26 August, 2020, which was answered in favour of the allottees by holding that by increasing the area at the final stage of possession, without any justification is an unfair trade practice on the part of the builder/developer. Relevant part of the said order reads as under:-

 

“…..The complaints have been filed mainly for two reasons.  The first is that the opposite party has demanded extra money for excess area and second is the delay in handing over the possession.  In respect of excess area, the complainant has made a point that without any basis the opposite party sent the demand for excess area and the certificate of the architect was sent to the complainant, which is of a later date.  The justification given by the opposite party that on the basis of the internal report of the architect the demand was made for excess area is not acceptable because no such report or any other document has been filed by the opposite party to prove the excess area.   Once the original  plan  is  approved  by    the

competent authority, the areas of residential unit as well as of the common spaces and common buildings are specified and super area cannot change until there is change in either the area of the flat or in the area of any of the common buildings or the total area of the project (plot area) is changed.  The real test for excess area would be that the opposite party should provide a comparison of the areas of the original approved common spaces and the flats with finally approved common spaces/ buildings and the flats.  This has not been done.  In fact, this is a common practice adopted by majority of builders/developers which is basically an unfair trade practice.  This has become a means  to extract extra money from the allottees at the time when allottee cannot leave the project as his substantial amount is locked in the project and he is about to take possession.  There is no prevailing system when the competent authority which approves the plan issues some kind of certificate in respect of the extra super area at the final stage.  There is no harm in communicating and charging for the extra area at the final stage but for the sake of transparency the opposite party must share the actual reason for increase in the super area based on the comparison of the originally approved buildings and finally approved buildings.  Basically the idea is that the allottee must know the change in the finally approved lay-out and areas of common spaces and the originally approved lay-out and areas.  In my view, until this is done, the opposite party is not entitled to payment of any excess area.  Though the Real Estate Regulation Act (RERA) 2016 has made it compulsory for the builders/developers to indicate the carpet area of the flat, however the problem of super area is not yet fully solved and further reforms are required…...”

 

Civil Appeal No(s).3312/2020 filed by the builder against the order dated 26.08.2020 aforesaid passed by the Hon’ble National Commission was dismissed by the Hon’ble Supreme Court of India, while holding that the complainant is entitled to get refund of the amount paid towards the excess area. 

9.                The next question that falls for consideration is, as to what amount of compensation, the complainant is entitled to get, for the period of delay in offering possession of the unit in question. It may be stated here that this issue has been set at rest by the Hon’ble Supreme Court  of India in  Civil Appeal No.6239 of 2019 (Wg. Cdr. Arifur Rahman Khan and Aleya Sultana and Ors. v. DLF Southern Homes Pvt. Ltd. (now Known as BEGUR OMR Homes Pvt. Ltd. and Ors.) decided on 24.08.2020, wherein, while discarding the one-sided terms of the Buyer’s Agreements, simple interest @ 6% per annum on the amount deposited by the complainant therein, in addition to the penalty amount, as prescribed in the agreement for delay in delivery of possession till delivery of actual and physical possession of the unit has been awarded. Relevant part of the said order is reproduced hereunder:-

 “…..Allowing the appeals in part, we set aside the impugned judgment and order of the NCDRC dated 2 July 2019 dismissing the consumer complaint. While doing so, we issue the following directions:

(i) Save and except for eleven appellants who entered into specific settlements with the developer and three appellants who have sold their right, title and interest under the ABA, the first and second respondents shall, as a measure of compensation, pay an amount calculated at the rate of 6 per cent simple interest per annum to each of the appellants. The amount shall be computed on the total amounts paid towards the purchase of the respective flats with effect from the date of expiry of thirty-six months from the execution of the respective ABAs until the date of the offer of possession after the receipt of the occupation certificate;

(ii) The above amount shall be in addition to the amounts which have been paid over or credited by the developer at the rate of Rs 5 per square foot per month at the time of the drawing of final accounts; and

(iii) The amounts due and payable in terms of directions (i) and (ii) above shall be paid over within a period of one month from the date of this judgment failing which they shall carry interest at the rate of 9 per cent per annum until payment…….”

                   Furthermore, in Lucknow Development Authority v. M K Gupta (1994) 1 SCC 243, the Hon’ble Supreme Court discussed about the extent of the jurisdiction of the Consumer Fora to award just and reasonable compensation for the harassment and agony suffered by a consumer. In Bharathi Knitting Company Vs.DHL Worldwide Express Courier Division of Airfreight Ltd.- (1996) 4 SCC 704, the Hon’ble Supreme Court accepted the contention that in an appropriate case, the Consumer Forum 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 relief, though, each case depends upon its own facts.  In view of the observations of the Hon’ble Supreme Court in the above noted cases, we are of the view that the provision of penalty @ Rs.10/- per square feet per month of the saleable area of the unit in question as per Clause 15 of the Agreement, which comes to a very meager amount, is not sufficient to compensate the complainants for the delay in delivery of possession and the mental agony, harassment and financial loss suffered by them on account of delay. Therefore, in addition to aforesaid penalty @ Rs.10/- per square feet per month of the saleable area of the unit in question, after the expiry of stipulated date of delivery of possession, the complainant is also entitled to simple interest @ 6% per annum on the entire amount deposited by them i.e. from 20.12.2012 (due date of possession) till 17.01.2022 (the date when actual possession has been given to the complainant).

10.              For the reasons recorded above, this complaint is partly accepted, with costs and Opposite Parties No.1 & 2 (DLF Homes Panchkula Private Limited), jointly and severally are directed as under:-

 

1.        To get the sale deed executed in respect of the unit in question,  in favour of the complainant, within a period of 30 days from the date of receipt of a certified copy of this order, on payment of requisite charges from him (complainant), if not yet done.
2.        To refund the amount received of increased area in excess (392.27 sq. ft.) from the complainant, as explained above, within a period of 30 days from the date of receipt of a certified copy of this order, failing which, thereafter, the entire accumulated amount shall attract 9% penal interest from the date of passing of this order, till realization.
3.        To pay interest penalty @ Rs.10/- per square feet per month of the saleable area of the unit in question, after the expiry of stipulated date of delivery of possession, and also simple interest @ 6% per annum on the entire amount deposited by the complainant starting from 20.12.2012 (due date of possession) till 17.01.2022 (the date when actual possession has been given to the complainant), within a period of 45 days from the date of receipt of a certified copy of this order, failing which, thereafter, the entire accumulated amount shall attract 9% penal interest from the date of passing of this order, till realization.
4.        To pay compensation for causing mental agony and harassment and also cost of litigation, in lumpsum, to the tune of Rs.1,35,000/-, to the complainant, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, the said amount of Rs.1,35,000/-, shall carry interest @9% p.a. from the date of passing of this order, till realization.

11.               The complaint qua Opposite Party No.3 (Kulbir Singh) being initial buyer stands dismissed.

12.              Certified Copies of this order be sent to the parties, free of charge.

13.               The file be consigned to Record Room, after completion.

Pronounced.

28.02.2022

Sd/-

[RAJ SHEKHAR ATTRI]

PRESIDENT

Sd/-

[PADMA PANDEY]

MEMBER

 

Sd/-

[RAJESH K. ARYA]

MEMBER

        

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