PER: HON’BLE MR. SAMARESH PRASAD CHOWDHURY, PRESIDING MEMBER
The instant complaint under Section 17 of the Consumer Protection Act, 1986 (hereinafter referred to as ‘the Act’) is at the instance of a couple/intending purchaser against the Developer on the allegation of deficiency of services in a consumer dispute of housing construction.
Succinctly put, complainants’ case is that on 08.03.2013 they entered into agreement with the Happy Highrises Limited to purchase of a residential flat measuring about 810 sq. ft. super built up area being unit No. 705 in 7th floor in the Tower named ‘Annapurna’ and one car parking space in the basement of the complex christened “Godrej Prakriti” lying and situated at Municipal holding No. 187F/1, Barrackpore Trunk Road, Kolkata- 700015, Dist- North 24 Parganas within the local limits of ward No. 14 of Panihati Municipality at a total consideration of Rs. 26,39,790/- for the flat and Rs. 2,50,000/- as car parking space aggregating Rs. 28,89,790/-. The complainants have stated that they have already paid Rs. 22,78,319/- as part consideration amount towards the said total consideration amount leaving a balance of Rs. 4,11,471/-. The complainants have further stated that as per terms of the agreement developer was under obligation to deliver possession of the unit to them within 31.12.2016. However, the OPs have failed to keep their promise. The complainants have also stated that they have claimed refund of the amount but the OPs are bent to deduct 20% amount paid by them without any fault on their part. Hence, the complainants have approached this commission with prayer for following reliefs, viz.- (a) a direction upon the OPs to refund the entire sum of Rs. 22,78,000/- along with interest @ 18% p.a.; (b) to pay compensation for harassment and mental agony; (c) costs of litigation etc.
The Opposite Parties by filing a written version have stated that the date of handing over the possession of the flat was scheduled by June, 2016 with a six months grace period i.e. within 31.12.2016. The OPs have stated that they intimated the complainants that there will be delay in handing over the flat and the flat shall be handed over by the middle of 2017 by which time the terms and conditions of the agreement for sale will be valid. The OPs have stated that the complainant is pre-matured one as the agreement has been revised from 2016 to the middle of 2017 and as such clause 15.5 of the agreement cannot be invoked. Therefore, the complaint should be dismissed with costs.
Both the parties have tendered evidence though affidavit. They have also given reply against the questionnaire set forth by their adversaries. Besides the same, parties have relied upon several documents including the agreement for sale dated 08.03.2013 and the letters and correspondences between the parties etc. At the time of final hearing, the OPs have filed BNA. Though the complainants were represented through their Ld. Advocate, yet in accordance with Regulation 13(2) of the Consumer Protection Regulations, 2005 they have not choose to submit any BNA.
The overwhelming evidence on record make it quite clear that on 08.03.2013 the complainants had entered into an agreement for sale with Happy Highrises Ltd. to purchase one self-contained residential flat measuring about 810 sq. ft. super built up area being unit No. 705 in the 7th floor in the Tower named ‘Annapurna’ and one car parking space in the basement of a complex christened “Godrej Prakriti” lying and situated at Municipal holding No. 187F/1, Barrackpore Trunk Road, Kolkata- 700015, Dist- North 24 Parganas within the local limits of ward No. 14 of Panihati Municipality at a total consideration of Rs. 26,39,790/- for the flat and Rs. 2,50,000/- as car parking space aggregating the Rs. 28,89,790/-. However, by an order dated 29 March, 2017 passed by the Hon’ble National Company of Law Tribunal, Mumbai Branch the ‘Happy Highrises Ltd’ has been amalgamated with Godrej Properties Ltd. Therefore, though the complainants had entered into an agreement for sale with Happy Highrises Ltd. but the complainants have made Godrej Properties Ltd. as OPs in this case.
Admittedly, the complainants have paid Rs. 22,78,000/- as part consideration amount towards the total consideration of Rs. 28,89,790/-.. As per terms of the agreement, the OP/developer was under obligation to handover the subject flat to the complainants within 31.06.2016 with a grace period for another six months i.e. within 31.12.2016.
It is undisputed proposition of law that the parties 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”
The evidence on record speaks that the OPs/developer could obtain completion certificate from the Municipal Authority only on 06.10.2018. As a consequence, there was failure to handover the possession of the flat to the complainants within a reasonable period. In fact, the completion certificate has been obtained after a delay of more than two years and during the pendency of the proceeding. It implies that at the time of lodging complaint by the complainants, the developer was not in a position to deliver the subject flat.
Ms. Tanushree Dhar, Ld. Advocate for the OP/developer has submitted that when the agreement comes to an end on 31.12.2016 they sent a letter on 28.03.2016 wherein they clearly explained the reason for delay of completion of the project and also clearly stated that the agreement for sale has been revised only on the point of handover the possession date being change from December, 2016 to middle of the year, 2017 and as the same terms was agreed upon by the complainants which will be reflected in their letter dated 14.11.2016. Assuming that the OPs/developer had scope to handover the flat in question in middle of 2017 but what we find from the record is that the OPs could obtain completion certificate from the Panihati Municipality on 06.10.2018.
Therefore, keeping in view the decision of the Hon’ble Supreme Court reported in (1994) 1 SCC 243 (Lucknow Development Authority –vs- M.K. Gupta) it can be safely hold that when a person hired the services of a builder for the construction of a flat and the same is for consideration, it is a ‘service’ as defined in Section 2(1)(o) of the Act. The inordinate delay in handing over the possession of the flat clearly amounts to deficiency of services. In another decision reported in (2018) 5 SCC 442 (Fortune Infrastructure –vs- Trevor D’Lima) the Hon’ble Apex Court has held that a person cannot be made to wait indefinitely for possession of the flat allotted to him and is entitled to seek refund of the amount paid by him along with compensation.
On perusal of the agreement for sale dated 08.03.2013 between the parties it would reveal that there is stark incongruities between the remedies available to both the parties. For the instance, clause.5.1 of the agreement entitled the OP/developer to charge interest @ 18% p.a. on the part of delay in payment of instalments by the complainants. On the other hand, as per clause 15.5 of the agreement for sale, if OP/developer fails to deliver possession of the apartment within the stipulated period, the complainant has to wait for a period of six months as grace period and thereafter in case of delay the OP/developer is liable to pay interest @ 9% p.a. only.
In a decision reported in (2019) 5 SCC 725 (Pioneer Urban land and Infrastructure Limited –vs- Govindan Raghavan ) the Hon’ble Supreme Court has observed:
“ 6.8. 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(1)(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the builder.”
On evaluation of materials on record and having heard the Ld. Advocate appearing for the parties, we have no hesitation to hold that by letters or correspondences the terms of the agreement for sale cannot be altered. When there is no subsequent or supplementary agreement, the period of limitation in handing over the possession cannot be extended. The OP/developer cannot shark off their responsibilities to fulfil their part and obligations as per terms of the agreement. The OPs/developer has failed to advance any force majeure circumstances on account of their fault and as such they must refund amount along with compensation in terms of clause 15.5 of the agreement for sale which reads as follows:
“ In the event there being no default on the part of the purchasers owners fails to deliver possession of the said unit within 30th June, 2016 the owner shall pay interest on the amount ot be paid by the purchaser till that date at the date of 9% per annum from 1st July, 2016 the expiry of the Notice of Possession and adjustable with the last instalments. If the owners fails to deliver possession of the said unit to the purchasers within 31st December, 2016, them this agreement would come to an end and he owner shall refund to the purchasers the entire amount paid by the purchasers together with interest thereon at the rate of 9% per annum from 1st July, 2016 till the date of payment.”
On evaluation of materials on record and having heard the Ld. Advocates appearing for the parties, we are of the view that the complainants being ‘consumer’ as defined in Section 2(1)(d) of the Act hired the services of OP/developer on consideration in a dispute of housing construction and the OPs were found deficient in rendering services to the complainants within the definition of Section 2(1)(g) read with Section 2(1)(o) of the Act. Accordingly, the complainants are entitled to some reliefs. In our view, a direction upon the Opposite Parties to refund Rs. 22,78,000/- along with compensation in the form of simple interest @ 9% p.a. from the date of each payment till its realisation will sub-serve the object of justice. Under compelling circumstances, the complainants have to come up in this commission and lodged complaint for which they are entitled to litigation costs which we quantify at Rs. 20,000/-.
In view of above discussions, the complaint is allowed on contest with the following directions:
(i) The Opposite Parties are jointly and severally directed to refund Rs. 22,78,000/- along with compensation in the form of simple interest @ 9% p.a. from the date of each payment in favour of the complainants till its realisation;
(ii) The Opposite Parties are jointly and severally directed to pay Rs. 20,000/- to the complainants as costs of litigation;
(iii) The above payments should be made within 45 days from date in terms of the above order.
