Delhi

StateCommission

CC/10/134

KAVITA BHAGAT AND ANR. - Complainant(s)

Versus

EMMAR MGF LAND LTD. & ORS. - Opp.Party(s)

28 Apr 2016

ORDER

IN THE STATE COMMISSION : DELHI

(Constituted under Section 9 of the Consumer Protection Act, 1986)

Date of Arguments : 28.04.2016

Date of Decision : 12.05.2016

Complaint No.134/10

 

In the matter of:

1. Smt. Kavita Bhagat,

w/o Shri Sunil Bhagat,

 

 

2. Shri Sunil Bhagat,

S/o Late Sh. J.P. Bhagat,

 

Both residents of 201, Rocky Hills,

Shirley Rajan Road,

Behind New Rizvi College,

Bandra (W), Mumbai.                                                                      .........Complainants

 

Versus

 

1. Emmar MGF Land Limited,

Through its Managing Director or

Chief Executive Functionary,

28, ECE House, 1^st Floor,

Kasturba Gandhi Marg,

New Delhi.

 

2. Active Promoters Private Ltd.

Through its Managing Director or

Chief Executive Functionary,

17-N, Asaf Ali Road,

New Delhi.

 

3. Conscient Infrastructure Private Limited,

Through its Managing Director or

Chief Executive Functionary,

K-1, Green Park, New Delhi.

 

 

4. Mehta Propmart Private Limited,

Through the office of O.P. No.1,

At Gurgaon.                                                                                      …...Opp. Parties.

                                                                

CORAM

 

O. P. Gupta, Member (Judicial)

 

1.     Whether reporters of local newspaper be allowed to see the judgment?

2.      To be referred to the reporter or not?

 

 O.P. Gupta, Member (Judicial)

 

1. The case of both the complainants who are wife and husband is that OPs-1,2 & 3 are regular real estate dealers, builders and property dealers, OP-4 is sale agent of OP-1.  OPs 1 to 3 entered into a joint venture for developing a group housing project which was to be raised by OP-1. The complainants were interested in purchasing residential flats, one for their residential use and another for residential use of their family members in or around Delhi. OP-4 approached complainants for booking flats.  OP assured that they would commence construction of residential flats called ‘The Palm Drive’ in December, 2007 and flats would be ready for possession by December, 2009.  The complainants  agreed to book a flat in the said complex, they signed application form on 28.09.2007 for allotment of residential apartment at aggregate consideration of Rs.96,63,380/-. They booked unit no. M-604 in Palm Drive, Sector-66,   Urban Estate, Gurgaon. The cost was to be paid in two stages, first being earnest money and second being construction linked instalments. The terms and conditions are totally one sided, oppressive, suppressive and throttling without affording any opportunity to go through the same or to ponder over the same.  Same cannot be considered to have any legal binding on consumers. Complainants paid booking amount of Rs.10 lacs.  OP-1 did not sign agreement despite repeated requests by the complainants.  OP-1 demanded of payment of instalment and on its assurance, the project was on schedule, made payments of two instalments of Rs. 3,45,000/- and Rs.9,20,345/- in January, 2008.  OP-1 committed to handover the possession within 36 months from the date of signing Buyer’s agreement with maximum of 48 months.  OP-1 forwarded copy of Buyer’s agreement after six months in February, 2008 in order to gain additional time for completion of project. The complainants were shocked to find that agreement was not for unit booked by them but was for a different flat and returned the same for providing agreement for correct unit. OP-1 sent another agreement in which major terms and conditions were not in conformity with understanding between the parties.  The complainants brought to the notice of OP who admitted error and promised to send correct lay out of the unit and agreement.  Once gain for third time, OP-1 sent wrong layout of unit where after complainants again requested OP-1 to send correct layout.  The complainants were shocked to receive email in May, 2008 stating that draft agreement was pending at the end of complainants signing. But same was ostensibly sent to cover up the delay and laches on the part of OP-1.  Being frustrated the complainants lost confidence in OP-1 and wrote email in May, 2008 that they did not want to subscribe to the plan and sought refund of the amount already paid by them. By that time neither the Buyer’s agreement has been signed nor construction had been commenced despite the fact that more than eight months lapsed since booking of unit. The OP-1 informed that a sum of Rs.10 lacs would be forfeited as per the terms and conditions of application if complainants wanted to exit from the booking. OP-1 used the money paid by complainants without incurring any expenses as no construction had commenced and for which no interest was being paid by the OP to the complainant.

 

2. OP-1 sent another location plan of the unit annexed with the printed Buyer’s agreement which complainants signed in June, 2008 (through dated 9 February, 2008),  Agreement provided for charging interest @24% contrary to the rate of 15% stated earlier. The complainants received an invitation to attend foundation ceremony on 01.12.2008 which clearly indicated that even after 15 months from signing application and receipt of money, OP-1 had not started construction. OP-1 gave revised construction schedule.  Complainants vide email dated 12.05.2009 were invited to inspect the site as upper basement slab of the building had been completed. On inspection of site, the complainant found that upper basement slab of some other block was completed and not of Block-M in which complainants had booked.  The OP-1 dispatched email dated on 21.08.2009 regarding new scheme for the same unit.  The same closed all doors for complainants. The complainants finally decided to quit and asked to refund back the amount with interest.  Senior officer of OP-1 asked the complainants to find another customer for their flats so that benefit of the scheme could be allowed to the new Buyer’s of the agreement.  Complainants made efforts and succeeded to find a buyer but OP-1 refused to extend the new scheme to the intending buyer on flimsy ground that notice for payment of instalment had been issued and benefit of the new scheme could not be given.  Complainants received another letter dated 22.02.2010 requiring them to pay another instalment within 30 days failing which allotment would be cancelled. The OP had included interest @24% per annum w.e.f. July, 2008 though the next instalment was to fall due on completion of lower basement roof slab which had not been completed till then.  Thus, it is a clear case of deficiency in service and unfair trade practice. Hence, this complaint to direct OP-1 to refund Rs.22,65,845/- being principal amount already paid by complainants, alongwith interest @18% per annum from the date of payment till date of refund. They have also prayed for damages for mental agony and harassment to the tune of Rs.one lac.

 

3. OP-1 & 2 filed written statement raising preliminary objections that no cause of action ever arose in favour of complainants, complaint has been filed with malafide intention to harass and extract money, complaint has been filed to cover up their own deliberate default in depositing instalments with OPs. The complainants deposited Rs.3,45,500/- only against request to deposit Rs.3,59,506/-. That too was beyond the time limit of 07.11.2007 as it was paid on 29.11.2007. Similarly, OP raised demand of Rs.9,20,345/- payable by 07.08.2007 which was deposited on 14.02.2008.  Construction commenced w.e.f. June, 2008 and OP raised demand for Rs.9,96,338/- vide letter dated 12.06.2008 but complainants defaulted.  After issuing various letters, OP-1 was constrained to issue letters dated 22.02.2009 and 19.03.2009 for termination of Buyer’s agreement. On merits, OP took same defence. Interest rate to be charged was revised w.e.f. 01.01.2009 from 15% to 24% per annum.

 

4. OP-3 filed separate written statement pleading that no relief has been claimed against it.  It also moved an application for deletion of its name.

 

5. Complainants filed rejoinder to written statement of OP-1 & 2. Complainant-1 filed affidavit of evidence-cum-argument.

 

6. OP-1 & 2 filed evidence by way of affidavit.  They filed affidavit of Ms. Monika Bhalora, AR. OP-3 filed affidavit of Sh. Lalit Jain, AR. OP-1 filed written arguments.  OP-3 filed written arguments.

 

7. I have gone through the material on record and heard the arguments.  The counsel for complainant submitted that facts are almost admitted. The OPs have not disputed the booking of flat or receipt of amount or change of rate of interest.  The only controversy is as to whether complainants are in default or whether OPs have failed to fulfil their obligations. For that the counsel for complainant submitted that OP-1 sent invitation letter dated 01.12.2008 to attend foundation laying ceremony which was 15 months after signing the application and receipt of money. In these circumstances, completion of project or delivery of possession by December, 2009 was impossible. That is why the OP gave revised construction schedule vide letter dated 01.12.2008.

 

8. Not only this, even as per revised schedule upper basement slab was to be completed by April, 2009 but complainants received email dated 12^th May, 2009 inviting to inspect the site.  On inspection it was found that upper basement slab of some other block was completed and not block M in which the complainants had booked the apartment. This allegation has not been specifically denied in the written statement.

 

9. On the other hand, the OP submitted that since complainants have booked two flats, one which the subject matter of complaint case no.C-134/10 and another flat subject matter of complaint case no. 135/10 titled as Sunil Bhagat Vs. MRGF Land Limited, the complainants are not consumer. He relied upon the decision of National Commission in Complaint Case No.270/13 titled as Smt. Madhu Saigal Vs. M/s. Omaxe Buildhome Pvt. Ltd. decided on 20.03.2014 in which it was held that a person purchasing more than one apartment is not a consumer. Reliance was also placed on decision of National Commission in Complaint Case No.5/14 titled as Sunil Gupta Vs. today Homes & Infrastructure (Pvt.) Ltd. decided on 03.02.2014.

 

10. On the other hand, the counsel for complainant refuted this argument by submitting that firstly OPs have not taken this plea in the written statement and they cannot be allowed to raise a new plea for the first time at the stage of final arguments. It was also submitted that in Complaint Case No. C-134/10 wife and husband are the persons who booked the flat and in Complaint Case No.135/10 husband and wife are the person who booked the flat. If applicant-1 is considered to be a real beneficiary, wife alone becomes complainant in Complaint Case No.134/10 and husband alone becomes complainant in Complaint Case No.135/10.  Otherwise also two persons are getting two flats booked. It is not that one person has got two flats booked. Still further husband and wife are separate entities in the eyes of law and they are entitled to have separate flat.  It does not come within mischief of one person getting two flats booked.

 

11. I find great deal of force in the arguments of counsel for complainant.  Not only this, a different view has been taken by National Commission in case titled as Nirmal Devi Gupta Vs. DLF Universal Pvt. Ltd. 2015 SCC online NCDRC 1782. Reliance was placed on another decision of National Commission in Kavita Ahuja Vs. Shipra Estate Lts. & Jai Krishna Developers Pvt. Ltd. 2015 SCC online NCDRC 930 (Complaint Case No.137/10) decided on 12.02.2015. It was held that purchase can be said be commercial only where it is shown for the purchaser is engaged in the business of purchasing and selling houses and /or flats on regular basis, solely with the view to make profit on sale of such houses. If a house is purchased purely as an investment and he is not undertaking trading of houses on regular basis and in the normal course of business provision or services in which he is engaged, it would be difficult to say that he had purchased houses for commercial purposes.

 

12. In the instant case, OP has not cited any example where complainants have engaged themselves in regular business of sale and purchase of houses. 

 

13. Thus, the objection of the OP is that complainant is not a consumer is overruled.

 

14. The counsel for complainant submitted that OP had been delaying the project at every stage, at the stage of commencement, at the stage of upper basement etc. The OP unilaterally changed the site of the project, the terms and conditions of the project, rate of interest. They had no right to do so and force their terms on the complainant. Thus, complainants were justified in seeking refund with interest. Argument appears to be well founded.

 

15. Counsel for the OP submitted that in case complainant wants to exit, OP is entitled to forfeit 10% of the amount on sale agreement as per the terms and conditions of agreement. The argument cannot be swallowed.  It was held by this Commission in Appeal No.843/02 titled as Shipra Estate Limited Vs. Naresh Chand Seth decided on 21.02.2013 that no service provider can be allowed to forfeit any amount deposited by the consumer for booking of flat when consumer asked for cancellation prior to commencement of construction and payment of further instalment. Even otherwise if booking amount is 10% of the basic cost of the flat, the same cannot be forfeited in entirety. At the most, 10% of the booking amount may be liable for forfeiture but not the entire amount. The OP was directed to refund entire amount with compensation of Rs.10 lacs. 

 

16. The aforesaid decision of this Commission was upheld by National Commission in Shipra Estate Limited Vs. Naresh Chand Seth II (2013) CPJ 120.

 

17. The case in hand is squarely covered by aforesaid decision. The basic cost of flat was Rs.96,63,380/-, complainants paid booking amount of Rs.10 lacs, complainants sought refund of the amount vide email sent in May, 2008 which was before the commencement of construction. Commencement of construction can be inferred from letter dated 01.12.2008 sent by OP-1 which was an invitation to attend foundation laying ceremony of project at the site. Hence, argument regarding forfeiture is rejected.

 

18. The counsel for complainant relied upon the decision of National Commission in Yogesh Sharma Vs. Unitech Ltd. (2015) SCC online NCDRC 3488.  In para 9 of the judgement observations of National Commission in another Complaint Case No.427/14 titled as Satish Kumar Pandey Vs. Unitech Ltd. decided on 08.06.2015 have been quoted as below:-

 

            “It is an undisputed proposition of law that ordinarily the parties are bound by the terms and conditions of the contract voluntarily agreed by them and it is not for a Consumer Forum or even a Court to revise the said terms. However, a term of a contract, in my view will not be final and binding if it is shown that the consent to the said term was not really voluntary but was given under a sort of compulsion on account of the person giving consent being left with no other choice or if the said term amounts to an unfair trade practice.”

 

19. The above observations are relevant for grant of interest. The agreement contains clause enabling OP to charge interest @18% per annum subsequently enhanced to 24% per annum if a allottee delays in payment. But does not provide for any interest payable to allottee, in case the OP delays in possession. When OP uses the money of complainant, there is no reason why it should not pay interest to the allottee.

 

20. In K.A. Nagmani Vs. Housing Commissioner, Karnataka Housing Board, CA No.6730-6731 of 2012 decided on 19.09.2012. National Commission awarded interest @12% per annum on  the refund amount.  In appeal, Hon’ble Supreme Court granted interest to the complainant @18% per annum.

 

21. In SWARN TALWAR & OTHERS V/S UNITECH LTD., Consumer Case No.347/14 decided on 14.08.2015, National Commission directed to refund with interest @18% all inclusive i.e. including compensation for harassment, mental agony, litigation expenses etc.

 

22. In view of the above discussion, I deem it proper to award interest to the complainants @12% per annum from the date of deposit till date of refund.

 

23. Counsel for OP submitted that OP is unable to refund the amount as the complainants have obtained order of status-quo on the very first date i.e. 28.04.2010. As far as I have been able to understand the said order, it is status-quo regarding forfeiture of the amount and not disposal of flat by the OP.  In any event, if said order is taken as status-quo on disposal of the flat, the same will get lifted on decision of this case vide present order. Still in order to make the things very clear I specifically permit OP to dispose of the flat for refunding the amount of the complainants.

 

24. In view of the above discussion, OP-1 is directed to refund Rs.22,65,845/- alongwith interest @12% per annum from the different dates on which the amount were deposited till the date of actual refund (all inclusive). The order will be complied within 45 days failing which complainants would be entitled to invoke Section 25/27 Consumer Protection Act.

 

25. A copy of this order be sent to all the parties free of cost.  File be consigned to Record Room.

 

(O.P. Gupta)

Member (Judicial)

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