Complaint Under section 35 of the Consumer Protection Act, 2019.

QUORUM:

SH. SANJEEV BATRA, PRESIDENT

MS. MONIKA BHAGAT, MEMBER

COUNSEL FOR THE PARTIES:

For complainants            :         Sh. Rajiv K. Bhatia, Advocate.

For OP1                         :         Sh. N.S. Rana, Advocate.

For OP2 to OP5             :         Exparte.

ORDER

PER SANJEEV BATRA, PRESIDENT

1.                Shorn of unnecessary details, the facts of the case are that the OPs being colonizer and developer represented and allured the complainants to purchase a plot developed by them in a residential township namely “Ireo Waterfront” consisting of high end independent built up floors/flats, plots, towers, lake, recreational facilities, landscaped gardens and such other utilities in the area of Village Devatwal, Dakha-I and II, Eissewal, Gahour and Birmi, Sub Tehsil, Mullanpur Dakha, Sidhwan Canal Road, Ludhiana. The complainants, who are real brothers were intended to buy plot for construction purpose for use of their family, so believing the representations of the OPs, they booked a residential plot in the said project. One plot No.B-162 Type K measuring 236.79 sq. yards, originally allotted to one Narinder Kumar, was endorsed by the OPs in favour of the complainants on the basic sale price of Rs.47,00,281/- including EDC and PLC. In this regard, a Floor Buyer’s Agreement dated 07.03.2012 was executed between the OPs and complainants. The complainants stated that as per clause 11.1 of the said agreement, the OPs were bound to handover the possession of the developed plot within the period of 24 months along with grace period of six months. The complainants have paid a sum of Rs.46,90,435/- till date to the OPs as per their demand but no development work has been completed by the OPs at the site despite the last payment on 27.01.2016 to the OPs. The complainants further stated that they were interested to raise construction on the plot, for which they visited the office of the OPs but neither the OPs handed over possession of the plot till May 2016 (last payment was made in January 2016) but inspite of lapse of almost 5 years there is no sign of any progress or development at the project site. Even the basic amenities like club house, boundary wall, roads are lying unconstructed, water sewage system, parks etc. which were promised by the OPs are missing and the representative of the OPs failed to give any satisfactory reply. The complainants further stated that they came to know from staff of the OPs that the company is in financial crisis and not going to develop the township due to want of certain approvals and funds. Even their accounts have been declared NPA and most of the areas including sold inventory is mortgaged by the OPs to various banks due to which they are not in position to hand over the plot complete in all respect along with basic amenities. The complainant requested the OPs to refund the amount paid by them along with interest but no response was given by the OPs. However, on 29.11.2018, the OPs without getting any statutory approvals and completion certificate illegally issued possession letter to the complainants even without any development at the site. OP2 to OP5 assured the complainants to do the needful but till date not even a single penny has been returned by the OPs nor possession in all respect has been given. This amounts to deficiency in service and unfair trade practice on the part of the OPs due to which the complainants have suffered mental and physical harassment for which the complainants are entitled for compensation. Even the complainants served a legal notice upon the OPs but to no effect. Hence this complaint, whereby the complainants have prayed for refund of amount of Rs.46,90,435/- along with interest as well as compensation of Rs.5,00,000/- and litigation expenses of Rs.55,000/- or in alternative to handover the possession complete in all respect along with OC and CC all basic amenities with penal delayed interest and compensation.

2.                The OPs did not appear despite service of summons and as such, the OPs were proceeded against exparte vide order dated 01.04.2021.

3.                Thereafter, OP1 filed an application for setting aside exparte order dated 06.04.2021. The said application was allowed vide order dated 09.01.2023 subject to payment of costs of Rs.1000/- and OP1 was permitted to file written statement, affidavit and documents.

                   OP1 filed written statement and by taking preliminary objection assailed the complaint on the ground of maintainability for having an Arbitration clause; the complainant has not come with clean hands; suppression of material facts; the complaint being hopelessly time barred etc. OP1 stated that the dispute if any between the parties is liable to be referred to the Arbitrator as per Arbitration clause agreed into between the parties. In fact, the unit in dispute was provisionally allotted to Mr. Narender Kumar vide letter dated 16.11.2011 but later on the same got transferred to the complainants on 13.02.2012. Plot buyer agreement was reduced into writing on 07.03.2012. As per clause 11.1 of the said Plot Buyer agreement dated 07.03.2012 it is mentioned that the respondent propose to offer conveyance of the plot to the allottee within a period of 24 months from the date of execution of this agreement and further the respondent was entitled to additionally period of 180 days after the expiration of said commencement period. The condition was only subject to the timely payment of the total sale consideration, stamp duty and other charges by the complainant. OP1 further stated that various reminders were sent to the complainant to make time payment. On one of the occasion the cheque issued by the customer was dis-honoured and he was duly intimated by OP1. Even the project is developed and OP1 has received the part completion certificate of its various pockets. All the basic amenities like club house, stat boundary wall, roads, water supply, sewerage line is constructed. OP1 further stated that it has already received the part completion certificate. However, the same later on got revoked. OP1 has again applied after completing the requirements. Now it is pending for approval by the concerned authority. According to OP1, the development in project is in full swing and it has offered the possession to the complainant on 29.11.2018. OP1 further stated that the complainants never requested to refund the amount.    

                   On merits, OP1 reiterated the crux of averments made in the preliminary objections. OP1 has denied that there is any deficiency of service and has also prayed for dismissal of the complaint.

4.                The complainant filed replication to the written statement of OP1 reiterating the facts mentioned in the complaint and controverted those mentioned in the written statement of OP1.

5.                In support of their claim, complainant No.2 Pritpal Singh tendered his affidavit Ex. CA in which he reiterated the allegations and the claim of compensation as stated in the complaint. The complainants also tendered documents Ex. C1 to Ex. C17 are the payment receipts, Ex. C18 is the copy of plot buyer agreement dated 07.03.2012, Ex. C19 is the copy of letter dated 29.11.2018 of the OPs, Ex. C20 are the photographs, Ex. C21 is the copy of legal notice dated 09.12.2019, Ex. C22 is the copy of order dated 25.08.2020 of the Hon’ble State Commission and closed the evidence.

6.                On the other hand, the counsel for OP1 tendered affidavit of Sh. Sumit Arora, Manager Legal, AIPL Housing & Urban Infrastructure Ltd., Haryana Office along with documents Ex. R1 to Ex. R43 and closed the evidence.

7.                We have heard the arguments of the counsel for the parties and also gone through the complaint, affidavit and annexed documents and written reply along with affidavit produced on record by both the parties. We have also gone through the written arguments submitted by the complainant.

8.                Admittedly, the complainants booked a plot vide application Ex. R33 with the OPs and accordingly, they were allotted a plot bearing No.B162 Type-K having area 236.79 sq. yards at the basic price of Rs.18,250/- per sq. yards i.e. total Rs.43,21,417.50 vide Plot Buyer’s Agreement dated 07.03.2012  Ex. C18 = Ex. R34. The total sale consideration of the plot was Rs.47,00,281/- including EDC and PLC, out of which the complainants made payment to the OPs vide different receipts, the detail of which is reproduced as under:-

The OPs were liable to deliver the possession of the plot within 24 months from the date of execution of Plot Buyer’s Agreement with additional grace period of 180 days after the expiry of said commitment period. But the OPs failed to carry out development work along with promised facilities at ground level. After a long wait for more than 6 years, the complainants requested the OPs to refund the amount received by them.

9.                Now the point of consideration arises for determination as to whether there is delay on the part of the opposite party in offering the possession of the plot to the complainant and if so, whether the complainant is entitled to refund and compensation of the amount and as to what extent?

10.              In this regard, the relevant terms and conditions for Type-K plot having area of 236.79 sq. yards vide Ex. C18 = Ex. R34 are set out herein below:-

          “Payment Plan

          11. Possession and Holding Charges

11.1  Subject to Force Majeure, as defined herein and further subject to the Allottee having complied with all its obligations under the terms and conditions of this Agreement, and the Allottee not being in default under any part of this Agreement including but not limited to the timely payment of the total Sale Consideration, stamp duty and other charges and also subject to the Allottee having complied with all formalities or documentation as prescribed by the Company, the Company proposes to offer conveyance of the said Plot to the Allottee within a period of 24 (Twenty Four) months from the date of execution of this Agreement ("Commitment Period"). The Allottee further agrees and understands that the Company shall additionally be entitled to a period of 180 (One Hundred Eighty) days ("Grace Period"), after the expiry of the said Commitment Period.

11.2 Subject to Clause 11.1, if the Company fails to offer conveyance of the said Plot to the Allottee by the end of the Grace Period, it shall be liable to pay to the Allottee compensation calculated at the rate of Rs. 50/- (Rupees Fifty only) per sq. yd. of the area of the said Plot ("Delay Compensation") for every month of delay thereafter until the actual date fixed by the Company for conveyance of the said Plot to the Allottee. The Allottee shall be entitled to payment against such 'Delay Compensation' only after completion of all documentation including registration of the Conveyance Deed.

11.3 Subject to Clause 11.1, in the event of delay by the Company in offering conveyance of the said Plot beyond a period of 12 months from the end of the Grace Period (such 12 month period hereinafter referred to as the "Extended Delay Period"), then the Allottee shall additionally become entitled to opt for termination of the Allotment/Agreement and refund of the actual paid up installment made against the said Plot. Such refund shall be made by the Company within 90 days of receipt of intimation to this effect from the Allottee, without any interest thereon. It is further clarified that the extent of payment of the Delay Compensation, as defined in Clause 11.2 above shall be limited to and calculated for the fixed period of 12 months only, which shall be paid by the Company along with the installments refundable under this clause. This option of termination may be exercised by the Allottee only up ill dispatch of the Offer of Conveyance by the Company to the Allottee whereupon the said option shall be deemed to have irrevocably lapsed. No other claim, whatsoever. monetary or otherwise shall be against the Company nor be raised otherwise or in any other manner by the Allottee.

11.4 1. However, the completion/development/laying out of Plots is delayed due to Force Majeure as defined herein, the Commitment Period and/or the Grace Period and/or the Extended Delay Period, as the case may be, shall stand extended automatically to the extent of the delay caused due to the Force Majeure circumstances. The Allottee shall not be entitled to any compensation whatsoever, including Delay Compensation for the period of such delay.

11.5 Subject to the provisions of this Clause 11, the Company shall notify the Allottee in writing to pay the balance Sale Consideration as per the Payment Plan along with other dues, sign the Maintenance Agreement and/or other documents as may be prescribed by the Company and thereafter to come for execution and registration of Conveyance Deed Offer of Conveyance") The possession of the said Plot shall thereafter be handed over to the Allottee along with its demarcation at site on the date communicated to the Allottee by a notice of possession for the said Plot ("Notice of Possession")

11.6 In the event the Allottee fails to accept and take the possession of the said Plot in accordance with the said Notice of Possession or fails to get the Conveyance Deed executed in accordance with the Offer of Conveyance and within the time indicated therein, the Allottee shall be deemed to have become the custodian of the said Plot from the date indicated in the Offer of Conveyance and the said Plot shall thenceforth remain at the sole risk and cost of the Allottee itself.

11.7 Notwithstanding any other provisions of this Agreement, the Allottee agrees that if it fails, ignores or neglects to take the possession of the said Plot in accordance with the Notice of Possession sent by the Company or fails to get the Conveyance Deed executed in accordance with the Offer of Conveyance within the stipulated period mentioned therein, the Allottee shall be liable to pay additional charges equivalent to Rs. 50/- (Rupees Fifty only) per sq yard per month of the area of the said Plot Holding Charges") The Holding Charges shall be a distinct charge in addition to the maintenance charges and not related to any other charges/consideration as provided in this Agreement.

11.8 Under no circumstances shall the Allottee be entitled to the possession of the said Plot unless and until the full payment of the Sale Consideration and any other dues payable under the Agreement have been remitted to the Company and all other obligations imposed under this Agreement have been fulfilled by the Allottee to the complete satisfaction of the Company.”

11.              When these terms and conditions contained in Ex. C18 = Ex. R34 are read together, it would reveal that they are heavily loaded in favour of the OPs and against the complainants at every step. Practically on one hand these conditions stipulate the valuable rights of the complainants and on the other hand, offer long rope for the OPs. Such unilateral, unreasonable contractual terms could not be deemed to be final and binding upon the complainant. In Pioneer Urban Land & Infrastructure Ltd., Vs. Govindan Raghwan (2019) 5 SCC 725, Hon’ble Supreme Court has observed that “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 incorporation of one sided clause in an agreement constitute an unfair trade practice as per Section 2(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling flats by the builder….., the appellant-builder cannot seek to bind the respondent with such one sided contractual terms.”

12.              The counsel for OP1 contended that the complainants are not entitled for any relief of refund of deposited amount. The development works have been completed within stipulated period and said fact has been intimated to the complainants and even the possession was offered after completion of external services like road, electricity and water etc.

13.              On the other hand, the counsel for the complainants refuted the allegations and contended that the complainant had invested a huge amount in the project of the OPs for the purchase of the plot for his residential purposes but due to the failure of the OPs in handing over the possession of the plot, complainants had to suffer immense harassment and was deprived of usage of the same. Not only this, till date the OPs are enjoying the benefits of the amount deposited by the complainants and such like other consumers.

14.              As per averments and allegations made by the complainants in their complaint as well as affidavit, a Plot Buyer’s Agreement Ex. C18 = Ex. R34 was executed between the parties. As per said Plot Buyer’s Agreement, the tentative cost of the plot was Rs.43,21,417.75 and the total sale consideration of the plot was Rs.47,00,281/- including EDC and PLC. The complainants in all deposited a sum of Rs.46,36,435/- with the OPs. This fact has not been denied by OP1 in its written statement and affidavit. As such, the complainants had adhered to the payment schedule and the possession was to be delivered in the year 2018 i.e. after six years from the execution of Plot Buyer’s Agreement Ex. C18 = Ex. R34 i.e. 24 months period of execution of agreement + 180 days grace period. However, the OPs have failed to deliver the possession of the plot to the complainants within stipulated period.

15.              The OPs sent a possession letter dated 29.11.2018 Ex. C19 to the complainants stating to hand over the physical, vacant and peaceful possession of Plot No.B162, East Sidhwan Gardens, IREO Waterfront, Ludhiana to the complainants. However, the said letter was assailed by the complainants in legal notice dated 09.12.2019 Ex. C21 and termed this letter illegal one. The complainants categorically asserted that the basic amenities and development work at site is incomplete and the promised facilities are missing at the spot. The legal notice failed to elicit any positive response from the OPs. OP1 in its written version rather admitted that they had received part completion certificate but the same has been revoked. They have again applied for the same after completing requirements which is still pending for approval. They have also admitted that the development in the project is in full swing. So these admissions clearly demonstrate that the basic amenities and the facilities along with necessary approvals of competent authorities which were required to be completed long ago are still in limbo. Even the OPs have failed to produce any field report regarding construction work on the spot nor the OPs have adduced any evidence despite grant of sufficient opportunities. Therefore, it cannot be said that the offer for possession was real and genuine and rather it appears to be an eye wash by the OPs in order to escape from every rising liabilities and penal consequences. So the OPs are guilty of rendering deficiency services and adoption of unfair trade practices.

16.              In this regard, reference can be made to Wg. Cdr. Arifur Rahman Khan and Aleya Sultana and others Vs DLF Southern Homes Pvt. Ltd. & others (2020) 16 SCC 512, whereby the Hon’ble Supreme Court of India has held that “failure of the developer to comply with the contractual obligation to provide the flat to a flat purchaser within the contractually stipulated period, amount to deficiency.” Further, it has been held by the Hon’ble Supreme Court that “in case of gross delay in handing over possession by builder beyond contractually stipulated period, flat purchaser is entitled to just and reasonable compensation for such delay and such compensation not constrained by terms of rate which is prescribed in an unfair bargain.

                   As such, after perusing the documents on record, this Commission is of the view that the complainants are entitled to compensation for deficiency of service and unfair trade practice on the part of the OPs. The provisions of the Consumer Protection Act enable a consumer to claim and empower the Commission to redress injustice done to the complainant. The amount of compensation can be determined by taking into facts and circumstances of each case and also mitigating circumstances that may arise in favour of the opposite party as well. Reference can be made to 2020(3) Apex Court Judgments 27 (S.C.) in DLF Home Developers ltd. (Earlier known as DLF Universal Ltd.) & another Vs Capital Green Flat Buyers Association Etc.

                   Considering the aforesaid facts and circumstances, it would be just and appropriate if the OPs are directed to refund the amount Rs.46,36,435/- (the amount deposited by the complainant with the opposite parties vide receipts Ex. C1 to Ex. C17)  along with interest @9% per annum w.e.f. 27.01.2016, the date of last payment vide Ex. C17 till its actual payment within 30 days from the date of receipt of copy of order, failing which the opposite parties shall pay an additional interest @3% per annum on the said amount. The interest paid on the amount shall be considered as compensation. However, the complainant is awarded litigation expenses of Rs.20,000/-.

17.              As a sequel of above discussion, the complaint is partly allowed with direction to the OPs to refund the amount Rs.46,36,435/- (the amount deposited by the complainants with the OPs vide receipts Ex. C1 to Ex. C17)  along with interest @9% per annum w.e.f. 27.01.2016, the date of last payment vide Ex. C17 till its actual payment within 30 days from the date of receipt of copy of order, failing which the OPs shall pay an additional interest @3% per annum on the said amount. The interest paid on the amount shall be considered as compensation. However, the complainants are awarded litigation expenses of Rs.20,000/-. Compliance of the order be made within 30 days from the date of receipt of copy of order. The liability of the OPs shall be joint and several. Copies of the order be supplied to the parties free of costs as per rules. File be indexed and consigned to record room.

18.              Due to huge pendency of cases, the complaint could not be decided within statutory period.

(Monika Bhagat)                               (Sanjeev Batra)

Member                                            President  

Announced in Open Commission.

Dated:12.07.2024.

Gobind Ram.