The instant complainant under Section 17 of the Consumer Protection Act, 1986 ( for brevity, “the Act” ) is at the instance of an intending purchaser against the developer/builder on the allegation of deficiency in services on the part of developer for not handing over possession as per terms of the Agreement in respect of a flat being NRD.234 along with a parking space being No. NUD089 in Tower-D in a Complex of Opposite Party named “New Town Heights” lying and situated at Plot No. III-E/5, Action Area – III, New Town, P. S. – New Town, District – North 24 Parganas in a consumer dispute of housing construction.
Succinctly put, complainant’s case is that being approached by the representative of the Opposite Party for construction of residential apartment at New Town, in the neighbourhood of Kolkata, Complainant applied for an apartment and one car parking space on 23.11.2007 upon payment of booking amount of Rs.3,00,000/-. Subsequently, on 20.10.2008 an Apartment Allotment Agreement (in short, ‘the Agreement’) was executed between DLF and the complainant and agreed price of subject property was settled at Rs.60,59,530/-. By a letter dated 09.04.2009 the OP informed the complainant that the Clause 10.1 of the Agreement which says delivery within 36 months from the date of signing of the agreement is to be read as three years from the date of booking. As per apartment, as the date of booking date was 23.11.2007 the OP was under obligation to handover possession within 23.11.2010 i.e. within three years from the date of booking. However, the OP has failed to keep their promise in handing over the possession of the apartment within the time frame despite receipt of the entire consideration amount. On 05.08.2013 the OP informed the complainant that Completion Certificate for Towers A to E have been received and the buildings are now fit for occupation and final demand for notice of possession would be despatched shortly. Ultimately, on 30.11.2013 the OP/developer issued a letter stating that Occupancy Certificate has been received but in order to enable of OP to handover physical possession, the complainant must arrange to remit the payment as per statement of accounts annexed to the said notice. The complainant states that he was shocked and surprise to receive the said letter enclosing the purported statement of accounts wherein the OP in utter breach and violation of agreement demanded sums in excess of the agreed consideration on account of increase an area, pro-rata charge for electricity, gas connection, government charges and also reduce the timely payment rebate to the complainant. The complainant by letters objected the said demands and stated that the illegality in the demands of the OP in their letter relating to cost of increase of super area, pro-rata charge for arranging electrical energy and gas, recovery of money in the name of other taxes and government charges etc. The complainant has also complaint for non-fulfilment of promise of OP for not providing common facilities. The complainant has stated that the OP insisted on the payment as per their demand in the statement of account dated 30.11.2013 and withheld possession till the same is met. Hence, the complainant has approached this Commission with prayer for several reliefs, viz. – (a) a direction upon the OP to recall its letter being dated 30.11.2013 and 04.06.2014; (b) an order of compensation in favour of complainant as may be found just and proper etc.
The Opposite Party by filing a written version resisted the allegation made by the complainant and has stated that the complaint is not maintainable as this Commission does not have jurisdiction where both the parties agreed to settle the dispute amicably or to refer the matter to arbitration or the Courts of Kolkata alone and the Hon’ble High Court at Calcutta alone shall have the jurisdiction. The OP has stated that at the time of execution of agreement dated 20.10.2008 that it has not been influenced by any advertisement/representation made by or on behalf of OP and the decision to enter into the agreement was not under the influence of OP. The OP has submitted that the complainant has miserably failed to point out any deficiency in services provided by them and they have acted only in accordance with the agreement and the demands were made vide letter dated 30.11.2013 was in accordance with the terms and conditions of the agreement and as such the complaint should be dismissed.
During hearing of the case, both the parties have tendered evidence through affidavit. They have also given reply against the questionnaire set forth by their adversaries. The parties have relied upon several documents annexed with the evidence on affidavit filed by them. At the time of final hearing, complainant has filed Brief Notes of Arguments. However, OP abstained themselves from filing any brief notes of arguments though they were represented through their Ld. Advocate.
At the outset, it would be pertinent to record that the value of the subject flat including the car parking space agreed upon by the parties was settled at Rs.60,59,530/- and service tax of Rs.65,722/- and club charges of Rs.60,000/- aggregating Rs.61,85,252/-. Therefore, the claim of the complainant comes within the pecuniary limit of this Commission as per provision of Section 17(1) of the Act. The Office of OP /builder is well within the geographical limit of this Commission in accordance with Section 17 (2) of the Act. Further, the subject matter of the dispute relating to ‘housing construction ‘ and when the complainant alleged deficiency in services, in accordance with the definition of Section 2(1)(o), this Commission has alone the jurisdiction to adjudicate the complaint.
Undisputedly, on 20.10.2008 an apartment allotment agreement in respect of an apartment vide no.NRD234 in Tower D with the accommodation for parking vide no. NUD089 in Tower-D at “New Town Heights” lying and situated at Plot No.III-E/5, Action Area – III, New Town, P. S. – New Town, District – North 24 Parganas was made in favour of complainant. It was agreed that the OP will sell the apartment having a super built up area approximately 1966 sq.ft. including the common areas and facilities and undivided proportionate share and interest in the said building along with a parking space on the terms and conditions stipulated therein at a total consideration of Rs. 60,59,530/-. It may be pertinent to record that the OP could obtain final sanction of building plan from New Town Kolkata Development Authority (NKDA) on 07.03.2011.
The evidence on record indicates that from the very beginning of the construction of project, the OP has adopted an unfair method in realising the amount from the intending purchasers. On 09.04.2009 OP wrote a letter to the complainant informing about delivery of the apartment within 36 months from the date of commencement of the project and as such they themselves amended clause 10.1 of the agreement to read as three years from the date of booking instead of three years from the date of signing of the agreement. However, by a subsequently letter dated 09.09.2011 the OP informed the complainant that there has been some delay in handing over the apartment and some major reasons are – (i) presence of Artesian wells under the side which needed extensive treatment for controlling the huge up thrust of water, (ii) the Aila Cyclone cost extensive flooding of the basement which required a lot of time to pump out the huge volume of water and (iii) the problems of non-availability of construction materials. However, it was assured that the process of handing over will begin during the 4th quarter of financial year 2011 -2012 i.e. during January – March, 2012 period.
In any case, it is not in dispute that on 30.11.2013 the OP issued notice of possession along with final statement of account where OP claimed Rs.4,22,565/- as cost of increase of area, balance amount of Rs. 30,000/- as club charges , Rs. 1,39,574/- as pro-rata charges for arranging supply of electrical energy @ 66.18 paise per sq.ft. excluding security deposit, Rs.20,938/- as pro-rata charges of reticulated gas connection, Rs.3,32,189/- as other costs including government charges and Rs.65,722/- as service taxes etc besides a claim of Rs. 6,28,478/- as stamp duty and registration charges.
The fact remains that the complainant had already paid Rs.64,75,917.50P i.e. more than the entire consideration amount. Needless to say, the parties are bound by the agreement. A person who signs a document contain certain contractual terms is normally bound by them even though he is ignorant of their precise legal effect. In a decision reported in AIR 1996 SC 2508( Bharati Knitting Company –vs. – DHL Worldwide 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”
Keeping in view the proposition of law laid down by the Highest Court of the Land, let us consider the relevant terms and conditions of the agreement. Clause - 10.1 relates to schedule of possession of the apartment, which re-writes below :-
“ The company, based on its present plans and estimates, con template to offer possession of the said apartment to the apartment allottee within a period of 3 years from the date of execution of this agreement or approval of the building plans whichever is later, unless there shall be delay or failure due to Force Majeure conditions and reasons mentioned in clauses 11.1, 11.2 and 11.3 or due to failure of apartment allottee (s) to pay in time the total price and other charges and dues/payments mentioned in this agreement or any failure on the part of the apartment allotees (s) to abide all or any of the terms or conditions of this Agreement.”
Clause 10.2 of the agreement relates to procedure for taking possession, which provides –
“ The company shall offer in writing the possession of the said apartment to the apartment allottee according to the terms of this Agreement ( the Notice of Possession ) to be taken over 30 days from the date of issue of such notice and the Company shall give possession of the Said Apartment to the Apartment Allottee provided the Apartment Allottee is not in default of any of the terms and conditions of this agreement and has complied with all provisions, formalities, documentation etc as may be prescribed by the Company in this regard.
The Apartment Allottee shall be liable to pay the Maintenance Charge on and from the date on which actual physical possession is taken or, on the expiry of thirty (30) days from the date of issuance of the Notice of Possession, whichever is earlier “.
Clause No. 11.4 of the agreement deals with failure to deliver possession which provides if an apartment allottee is not found defaulter, compensation of Rs. 5/- per sq.ft. of the super area of the said apartment per month for the period of such delay beyond three (3) years or such extended periods is permitted under the agreement and the adjustment of such compensation shall be done only at the time conveyancing the said apartment to the apartment allottee first named in this agreement and not earlier.
The evidence on record clearly suggest that as per agreement, the OP was under obligation to handover the subject flat/apartment to the complainant positively by 23.11.2010 but the OP has failed to keep the promise and in fact only on 30.11.2013 the notice of possession was issued with a statement of accounts to make payment of a huge amount as recorded above. The OP has failed to advance any Force Majeure circumstances and in support in the letter dated 09.09.2011 regarding delay in delivering possession or no tangible evidence is forthcoming to that effect. Considering the same, in accordance with the terms of agreement, the OP is liable to pay compensation @ Rs. 5/- sq.ft. of the super built up area of complainant’s apartment i.e. 1966 sq.ft . x 5 per sq.ft. per month for the period from committed date of delivery of possession i.e. from 23.11.2010 till the actual date of delivery of possession.
Now, we shall deal with the allegation of deficiency in services point wise as levelled by the complainant -
- Increase in super built up area
In the final statement of accounts, the OP has claimed Rs. 4,22,565/- as cost of increased area. Ld. Advocate for the complainant has submitted that under Clauses 1.7 & 1.8, of the agreement, the super area is treated ‘tentative’ against an increase or decrease of which the complainant has no right to protest. Further there is nothing in the agreement which gives a reasonable highlight as to under what circumstances the super built up area be either increased or decreased.
It has come to notice that there were altogether sanctioned building plan for nine towers but OP has constructed another two towers subsequently being AA & JJ meaning thereby in place of nine towers in the project, the OP has constructed 11 towers in the said project. According to OP, the West Bengal State Electricity Board (WBSEB) sanctioned the revised electrical scheme for which the OP had to introduce additional sub-stations and electrical equipment in the basement of each tower and hence it increased the built up area of main sub-station building. This was redistributed to all towers and hence, there was an alleged increased in super built up area in some towers and reduction in some towers.
It could not be understood if additional area is built and on the basis of the same, alleged super built up area is increased due to alleged installation of additional electric sub-station, then how can super built up are be decreased in some towers in the complex instead of increase of super area in proportionate basis for all towers. When two additional towers being AA & JJ were constructed by a surprise, the common facilities and areas will certainly be shared by more number of apartment owners and it could not be understood how the super area of the apartment can increase.
Moreover, the Clause 9.2 does not authorise the OP to claim amount from an intending purchaser without giving him prior information regarding increase of area. It appears that the final building plan was sanctioned on 07.03.2011 by New Town Kolkata Development Authority (NKDA) and as the OP is not producing the revised scheme of WBSEB, therefore, an adverse inference should be drawn against the OP.
Therefore, the claim of OP on account of cost of increased area appears to be illusory and as such the OP is not entitled to the same.
- Pro-rata charges for arranging supply of electrical energy @ 66.18P per sq. ft.
The OP has claimed a sum of Rs.1,39,574/- @ 66.18 per sq. ft. on account of pro-rata charges for arranging supply of electrical energy for converting 33 KV power to 1 KV power for which transformers, panels (high tension and low tension) special relay control etc.
Serial Nos.18 & 19 of Part A to Annexure –IV to the Agreement provides “common areas an facilities includes electrical sub-station/transformer/electrical panel/electrical LT Panel Room and as such are included in computation of super built up area in the agreement. The claim made by the OP was totally illegal and beyond the agreed terms and conditions in as much as for the self-same service OP has charged twice. To make any apartment in a habitable condition – water, drainage and electricity is a must at the time of selling the apartment. The OP/developer was well aware that they have to make minimum infrastructure for electricity and the same was included in the super built up area. The cost of electric meter installation and security deposit is directly paid by the complainant to electricity supply company. Therefore, it is palpably clear that the OP has no authority to claim an amount of Rs.1,39,574/- as pro-rata charges for arranging electric energy when they could not account for the same.
Therefore, when OP has done nothing except the basic infrastructure which is included in the super built up area, the claim of OP on account of pro-rata charges for installation of electricity and electricity is totally untenable.
- Other costs including Government charges –
The final statement of accounts indicates that the OP has claimed Rs.3,32,189/- as other costs including government charges @ Rs.157.51P per sq. ft. In their written version, the OP has not explained anything to that effect. In this regard, Ld. Advocate for the OP has submitted that as per clause 2 of the Agreement, where the apartment of the allottee is held responsible to pay all government charges, tax on land, principal tax, property tax and tax fees etc. the definition of Tax, the apartment allottee agreement includes sale tax also. It is stated that the Central Government in the Union Budget-2010/2011 has included the provision of service tax on sell of property/flat in case any amount to sell of such property/flat is taken by the builder on completion of the construction of the flat.
The fact remains that the OP has not given any explanation of such charges. The OP was under obligation to give account to the complainant about payment of their hard earned money on account of payment of costs including government charges. Moreover, by term ‘other costs’ the OP has not explained which costs will be treated as other costs and whether really OP is liable to pay the same in the respective accounts of Tax Department of the government or not. In absence of any explanation or documents in this regard, the claim of OP on this score also cannot be accepted. In fact, OP had nothing to substantiate and such demand was made taking the advantage of the fact that already the entire consideration has been paid and the complainant had no option but to pay the illegitimate demand to take the possession of the apartment.
Accordingly, OP is not entitled to any amount on account of other costs or government charges.
- Maintenance Charge and Holding Charge:-
According to Clause 10 or Clause 14.3 of the Agreement, the apartment allottee shall be liable to pay the maintenance charge on and from the date on which actual physical possession is taken or on the expiry of thirty (30) days from the date of issuance of the Notice of Possession, whichever is earlier.
As per terms of the Agreement, the OP/developer has no authority to demand maintenance for any period prior to actual physical possession being handed over. Equally the OP/developer shall have no authority to demand any holding charge as the delay in giving possession is on their own part and they are wrongfully withholding possession till date. However, the complainant will be liable to make payment on account of government charges only upon receiving physical possession of the flat and car parking space from the OP.
So far as claim of the complainant for common facilities or benefit like – swimming pool, tennis court etc. are concerned, the same cannot be entertained because prior to lodging complaint, no permission was sought for in accordance with Section 12(1)(c) of the Act to file the complaint in a representative capacity. Therefore, there is hardly any reason to discuss about the common areas and facilities of the complex, as alleged by the complainant.
Mr. Saptak Sanyal, Ld. Advocate for OP assisted by Mr. Ananda Ghosh, Ld. Advocate for the OP/developer has submitted that as the agreement was executed on a non-registered document, it has no legal force. Mr. Srijan Nayak, Ld. Advocate for the complainant opposed the said submission and contended that in view of the object behind the legislation of the Act, a Forum constituted under the Act cannot debar a consumer simply on a technical point keeping aside the merit of the same.
Upon hearing the Ld. Advocates and keeping in view the avowed object behind the legislation of the Act and the authorities, it can be said that a Consumer Forum should not get bogged down by hyper technicalities and in a complaint under the Act, it has to be seen whether the complainant is a ‘consumer’ or not in accordance with Section 2(1)(d) of the Act and if so, whether there was any deficiency on the part of the service provider in rendering services in accordance with Section 2(1)(g) read with Section 2(1)(o) of the Act.
Ld. Advocate for the Opposite Party has also contended that when there is an arbitration Clause in the Agreement, the dispute should be settled amicably by mutual discussion or to be referred to the Arbitral Tribunal for settlement in support of such submission, Ld. Advocate for the OP has drawn my attention to the decision of a Single Bench of Hon’ble Calcutta High Court in the case reported in (2013) 1 CAL L T 546 [Sudarshan Vyapar vt. Ltd. & Anr. - vs. - Madhusudan Guha].
In the case of DLF Ltd. - vs. - Mridul Estate Pvt. Ltd. reported in III (2013) CPJ 439 the Larger Bench of Hon’ble National Consumer Commission considering several decisions of Hon’ble Supreme Court reported in – (1) the case of SBP & Co - vs.- M/s. Patel Engineering Company Ltd. & Anr., AIR 2006 SC 450; (2) National Seeds Corporation Ltd. - vs. - M. Madhusudan Reddy & Anr., I (2012) CPJ 1 (SC); (3) Lucknow Development Authority - vs. - M.K. Gupta, III (1993) CPJ 7 (SC) and several other judgements has observed that the Consumer Fora constituted under the C.P. Act are not bound to refer the dispute raised in the complaint on an application filed under Section 8 of the 1996 Act seeking reference of the dispute to an Arbitral Tribunal in terms of valid arbitration clause in the agreement entered into between the parties. The OP in CC/188 of 2010 preferred an appeal in the Hon’ble Supreme Court and the Hon’ble Supreme Court in the case of Rosedale Developers Pvt. Ltd. - vs. - Aghore Bhattacharya reported in (2015) 1 WBLR (SC) 385 has held that the National Commission did not commit any error by holding that the remedy of arbitration available to the complainant does not bar the jurisdiction of the Consumer Fora and the Consumer Fora are not under an obligation to refer the matter to the Arbitral Tribunal.
After amendment to Section 8 of Arbitration Act, 2015 a bunch of applications filed by the developers/builders and in disposing of the same by the Larger Bench of the Hon’ble National Commission reported in III (2017) CPJ 270 (Aftab Singh - vs. - EMAAR MGF Land Ltd. & Anr.) has observed that in the context of consumer jurisprudence, the Hon’ble Supreme Court has not disturbed the earlier opinion regarding the arbitrarily of consumer disputes rendered in the pre-amendment era rather it has affirmed the protection granted to the consumers from private resolution. After a detailed discussion with reference to several judgement of the Hon’ble Supreme Court including the decision reported in (2016) 10 SCC 386 (A. Ayyasamy - vs. - A. Paramasivam & Ors.) the Hon’ble National Commission has arrived at the conclusion that in light of overall architecture of the Consumer Act and Court - evolved jurisprudence, amended Sub Section (1) of Section 8 cannot be construed as a mandate to the Consumer Forums, constituted under the Act, to refer the parties to arbitration in terms of the arbitration agreement. Consequently, the Hon’ble National Commission reject the arguments on behalf of the builder and hold up that an arbitration clause between the complainant and the builder cannot circumscribe the jurisdiction of a Consumer Forum, notwithstanding the amendments made to Section 8 of the 1996 Act.
After giving due consideration to the submission made by the Ld. Advocates appearing for the respective parties and relying upon the materials on record, it is quite clear that the OP/developer was under obligation to handover the subject flat within 23.11.2010 as per their commitment but they have failed to keep their promise rather they have made some illegal demand through a statement of accounts along with notice of possession dated 30.11.2013. Therefore, the OP was found deficient in rendering services towards the complainant. Accordingly, the complainant is entitled to some reliefs.
In view of the discussion above, the complaint is allowed on contest with the following directions:-
- The Opposite Party is directed to deliver possession and to execute the Sale Deed in favour of the complainant on payment of stamp duty and registration charges within 90 days from date after obtaining Completion Certificate from the competent authority;
- The Opposite Party is directed to pay compensation in form of interest @ Rs.5/- per sq. ft. per month from the committed date of possession i.e. from 23.11.2010 till the date of delivery of possession;
- The Opposite Party is directed not to claim any amount under the head of (a) cost of increased in area; (b) pro-rate charges for arranging supply of electrical energy and (c) Other costs including government charges from final statement of accounts,(d) maintenance for any period till handing over possession and (e) any holding charge whatsoever for withholding possession;
- The Opposite Party shall pay a sum of 10,000/- as cost of litigation to the complainant which must be paid within 30 days from date otherwise the amount shall carry interest @ 8% p.a. from date till its recovery.
- The balance amount, if any, must be paid by the complainant at the time of delivery of possession subject to adjustment of the amount mentioned in (ii) above;
