Reserved

State Consumer Disputes Redressal Commission

U.P. Lucknow.

Complaint  Case No.109 of  2017

Mrs. Milan Bansal, aged about 51 years,

W/o Mr. Vishnu Datt Bansal, R/o D-23, 71-B,

Janakpuri, New Delhi.

…Complainant.

Versus

1- Jaypee Infratech Limited,

    Registered Office situated at 128,

    NOIDA through its Director. 

2- Jaiprakash Associates Limited, 

Head Office situated at 128,

    NOIDAthrough its Director.

    ...Opposite parties.

Present:-­

1- Hon’ble Sri Rajendra  Singh, Member.

2- Hon’ble Sri Vikas Saxena, Member.

Sri Abhishek Singh, Advocate for the complainant.

Sri Pratul Pratap Singh, Advocate for Opposite parties.

Date :07.10.2022

JUDGMENT

Per Sri Rajendra  Singh,  Member- The brief facts of the case are that, that the opposite parties are a company engaged in the construction/development and allotment of the flats with all the basic civil amenities, lucrative advertisement were made by the opposite parties to attract the consumer in the market demonstrating themselves to be pioneered in the construction and development activities. On the assurance of the timely construction the complainant applied for  residential accommodation in the scheme through application dated 19.2.2012. It is assured by the opposite parties that they shall construct the apartment within 42 months. The opposite parties assured all its buyers that they have all the necessary pre-requisite permission from the competent authorities to construct the apartments. This assurance influenced the mind

of the complainant and she opted for a residential unit. The opposite parties by means of letter of allotment dated 16.4.2012 allotted unit reference no.GDI0240104, situated in Garden Isles, the area of the unit is admeasuring 1205 sq. ft,  total cost of the flat is agreed to Rs.51,07,355.00. It was reiterated by the builder in this letter of allotment that the possession of this unit shall be delivered within a period of 42 months.

It is agreed between the parties that the payment of the installments is to be made in accordance with the development of the unit, the last installment is to be paid by the complainant at the time when the opposite parties offer the physical possession of the fully developed unit. Thus, it is obligatory on the part of the opposite parties to complete the construction of the unit in agreed period of time. The opposite parties in a most illegal and arbitrary manner did not abide with their assurance of the timely construction of the unit and the project work is not completed by the opposite parties in schedule period of time that is till 16.10.2015 (42 months) per contra the complainant deposited the entire sale consideration amounting to Rs.35,14,033.00 with the opposite parties, however,  the project work is t halt and there is no construction activities which are being done by the builder as on site, the entire sale consideration deposited by the complainant is being illegally and arbitrarily retained by the opposite parties.

The opposite parties demonstrated that they are in the possession of the land where the project is situated and theypossess all the necessary pre-requisite permission to construct the apartment from the competent authority, further it was

assured to the consumer akin to other similarly placed allottees that the land is encumbrance free and the possession of the unit shall be provided within agreed/scheduled period of time, it is also demonstrated by the builder that the scheme is sanctioned and approved by the bank and the finance facilities are also available, all these factors influence the mind of the innocent consumers who are in direct need of a residential unit.

It is worth to submit here that the terms and conditions addendum to agreement are contained in a standard format, which is akin and common for all the allottees in the entire project, the complainant has no alternative option except to put his signatures on the dotted lines, no alteration or amendment in these unilateral  terms and conditions which are drafted and intended to best suit the convenience of the builder can be made by the complainant.

The opposite parties at the time of the deposit of the booking amount assured the complainant that the possession of the flat shall be delivered with all the civil amenities till 16.10.2015 (within 42 months), it was specifically assured by the opposite parties that the requisite permission from all the concerned authorities to construct the apartment has already been obtained by them after taking the possession of the land. It is pertinent to mention here that had the opposite parties communicated to the complainant that they shall delay the construction of the entire project then the complainant would not had opted for a flat in the scheme of the  opposite parties. It is worth to mention here that the complainant is deprive of his legal right to enjoy the possession of the flat.

with effect from the 16.10.2015 and is being put to extreme mental and physical harassment by the builder.

From the aforementioned facts it is amply clear that the opposite parties obtained huge sum of money from the entire allottees of the scheme and instead of putting the same for the development of the flats misappropriate the same, for which the opposite parties are liable to produce the expenditure and account statement of the scheme before this Hon’ble Commission.

The opposite parties have committed serious deficiency in services by not delivering the physical possession of the fully developed allotted apartment to the complainant within the agreed period of time, the conduct of the builder in this case established the fact that he was always interested in claiming the money on the pretext of the construction of the flat and did not bother to construct the flat in the agreed period of time, it is worth to mention here that he complainant deposited the money with the builder with a hope for a roof on his bead, but till this date the builder did not completed the allotted flat of the complainant despite of the fact that an amount of Rs.35,14,033.00 stood deposited by the complainant with the opposite parties and the money is being utilized by the builder till the filing of this complaint petition. The opposite parties are also accountable for unfair trade practice since they have enjoyed and utilize the hard earned money of the complainant without providing the possession of the apartment within agreed period of time with all the basis amenities. It is submitted here that the opposite parties are also liable to pay the loss of rent to the complainant which is quantified by the complainant to the tune of Rs.20,000.00

per month with effect from 16.10.2015 till the date of the refund of the entire deposited amount along with interest. The complainant is entitled for the following reliefs: 

1. Direct the opposite parties to refund an amount of Rs.35,14,033.00 along with interest at the rate of 24% from the dates of respective deposits till the date of actual refund.

1. Direct the opposite parties to pay an amount of Rs.20,000.00 towards rent with effect from 16.10.2015 till the date of the refund of the deposited amount along with interest.

1.  Direct the opposite parties to pay appropriate compensation and damages witch this Hon’ble Commission may deem it just and proper in the facts and circumstances of this case.

1. Direct the opposite parties to pay punitive damages to the complainant which this Hon’ble Commission may deem it just and proper in the facts and circumstances of the case. 

1. Allow the complaint and direct the opposite parties to pay a sum of Rs.1,00,000.00 towards cost of the case.

1. Any other order which this Hon’ble Commission may deem fit and proper in the circumstances of the case may also be passed.

The opposite parties have filed theirwritten statement stating that the instant complaint under reply herein is completely devoid of merits and has been filed with the sole motive to harass the respondents herein, abuse the process of law and to extort benefits from the respondents herein which cannot be countenanced in any manner whatsoever. There is no

negligence, deficiency in service on their part nor have the respondents indulged in any unfair trade practice. The complainant has no locus to complain about the purported delay in completion of the project which in any case occurred due to force majeure conditions. Therefore, the purported grievance of complainant is baseless, devoid of merit and is infact tainted with malafides.

The complainant is not interested in the possession of the subject apartment as she has not sought any claim for possession in the instant complaint. It is also pertinent to mention here that the complainant have admitted agreed in para 11 of the complaint that she has incurred the loss of rent of Rs.20,000.00 per month and therefore, it is crystal clear that the subject apartment was booked for profit making purpose. The complainant has booked the flat in question for speculating in the real estate market and not for her personal use. As such she is not consumer as defined under section 2(1)(d) of the Consumer Protection Act, 1986 and the instant complaint filed by the complainant is liable to be dismissed on this  ground only.

It is submitted that the complainant has not claimed the possession of the subject unit in the instant complaint and has only claimed the refund of amount paid by her alongwith the interest and compensation towards loss of rent, compensation, damages in addition to the punitive damages with the cost of the case at exorbitant rates. Thus, it is crystal clear that the complainant is not interested in taking possession of the subject unit rather she wants to claim damages to generate profit only. Therefore, the instant complaint is liable to be dismissed out rightly. 

It is submitted that there is an arbitration clause no.10.9 for amicable settlement in the agreed standard terms and conditions for the application form duly signed before the hand by the allottees which provides as under:

“Dispute Resolution: Any and all disputes arising out the or in connection with or in relation hereto shall so  far as possible, in the first instance, be amicably settled between the company the applicant. In the event of disputes, claim and/or differences not being amicably resolved such disputes shall be referred to sole arbitration of a person nominated for the purpose by Chairman of the Company. The proceedings of the Arbitration shall be conducted in accordance with the provisions of the Arbitration & Conciliation Act, 1996, amended from time to time, or any rules made there under. The application hereby gives his consent to the appointment the sole arbitrator as specified herein above and waives any objections that he may have to such appoint or to the award that may be given by the Arbitrator. The venue for the arbitration shall be New Delhi, India.”

It is hereby clarified that the complainant has to approach to amicably settle the instant issue, between the parties as provided in agreed standard terms and conditions. Therefore, the complainant must invoke the arbitration clause after trying to amicably settle the dispute at the first instance.

The respondents herein are also filing an application under  section 8, of the Arbitration and Conciliation Act, 1996, however the present reply has been filed to comply with the limitation period provided. Without prejudice to the application u/2 8, filed alongwith the present reply. It is also pertinent to mention that the Hon’ble National Commission

has admitted the application u/s 8 of the Arbitration and Conciliation Act, 1996 in the complaint case no.1293/2016 titled as Kirat Singh vs. Jaypee Infratech Ltd.&ors. and has been pleased to issue notice to the complainant in that cse vide ordered dated 27.10.2016. Also in another case titled as Nitesh Chandok vs. today Homes and Infrastructures Pvt. Ltd. C.C. no.900/2016, this the Hon’ble National Commission was pleased to constitute the larger bench to hear and decide the arbitration application vide order dated 31.8.2016.

It is submitted that the claim regarding mental agony being imaginative and without any basis, do not relate to the claim regarding the subject apartment. It is to be proved by the claimant with strict proofs and therefore, the same is untenable in the eye of law and liable to be dismissed.

It is also relevant to mention here that the complainant has been violating the terms of the allotment by failing to make payment of installments timely. It is submitted that on 7.2.2013 a notice for cancellation was issued to the complainant with the request to make the payment of Rs.12,86,759/-. Also as per the accounts maintained by the respondents in regular course of its business, an amount of Rs.3,77,456.11 is due and payable by the complainant to the respondents including an amount of Rs.47,117.69 on account of interest accrued on delayed payment of installments. It clearly shows that the complainants are defaulters in timely payment of installments as per the payment plan of allotment and therefore cannot take the benefit of her own wrong. Moreover, the complainant is misleading the court by concealing these material facts. Therefore, the complaint is

liable to be dismissed on this count also. It is also pertinent to mention here that the respondents as a good gesture provided a discount of Rs.200/- per sq. ft. to the complainant at the time of booking.

Yamuna Expressway Project was conceived by the Government of UP in the year 2001 envasing construction of an access controlled six lane (extendable to eight lane) Expressway running about 165 Kms. connecting Noida to Agra. The project being on BOT basis further envisaged development of 25 million sq. mt. of land along with Expressway.

M/s Jaiprakash Associates Ltd. were selected as the lowest bidder and a concession agreement was signed between the U.P. Government and Jaiprakash Industries Ltd. (concessioner) on 7.2.2003. This was later assigned to M/s Jaypee Infratech Ltd. (JIL), a SPV of the respondent herein. An integral part of construction of Expressway, the Concessioner was granted rights to develop 25 million sq. mt. (2500 hectare or 6175 acers) land (land for development (LFD) along the Expressway at five or more locations, out of which one included Jaypee Greens Noida, Distt. G.B. Nagar.

As per the concession agreement with the Government of UP, the Jaypee Infratech Limited was required to develop the Expressway from Noida to Agra and was to fund the cost of the project either through developing five townships or by sale of land. The respondent in terms of the concession agreement for Yamuna Expressway Project incorporated a special purpose vehicle namely Jaypee Infratech Limited. The entire land for development i.e. at five locations including Noida, (where Jaypee Greens Wish Town

Project is being constructed) as leased to Jaypee Infratech Limited by Yamuna Expressway Industrial Development Authority and Jaypee Infratech Limtied launched an integrated Project named Jaypee Greens Wish town in Sector 128, 129, 131, 133 & 134 of Noida. The said project consists of residential, institutional commercial & recreational development.

Jaypee Infratech Limited itself launched various residential sub-projects in the said Jaypee Greens Wish Town Project. One of the  said sub-projects, which was launched by the Jaypee Infratech Ltd. was named and styled as “Kasa Isles” (hereinafter referred as “ the said subproject”) wherein interalia proposed to allot premium apartments to its prospective buyers.

The complainant, at her own end made herself fully aware of the planning and actual site development on the wishtown project. Only upon such satisfaction at their own end, regarding the plans, terms and conditions of agreement etc. the complainant applied for booking of apartment by submitting on application no.16171 dated 19.2.2012 for provisional allotment along with an undertaking and standard terms and conditions.

Clause 6 of the undertaking  given by the complainant attached with the said application are quoted hereunder as:

“6. I/we have seen and understood the scheme of development, tentative plans/other documents at Jaypee Greens and I/we also agree to abide by all the terms and conditions of NOIDA or any other statutory or civic authority, to which the JIL and consequently, the applicant, is

subject to or any other condition which the company/JIL may prescribe.”

Pursuant to the above, the respondents herein issued a provisional allotment letter dated 16.4.2012 allotting an apartment being unit reference no.GDI0240104 in “Garden Isles” sub-project of the respondents admeasuring a super area of 111.94 sq. mtrs. in favour of the complainant herein. The provisional allotment letter provided the consideration of the said unit as Rs.51,07,355.00 and a payment plan was also provided therein. Further, the time period of possession was provided as 42 months in the said provisional Allotment letter subject to the standard terms and conditions agreed by the complainant alongwith the grace period of 180 days.

It is stated that as per the approvals, the respondents herein carried out the development work on the said project. However, for reasons beyond the control of the respondent therein i.e. due to force majeure events such as shortage of labour, scarcity of water, restrictions in excavations, villager agitations as well a legal impediments which continued to exist some time which cause delay in the project and which such facts were duly brought to the notice of complainant herein. It is humbly submitted that due to such events the delivery of project got reschedule.

It is opposite to note that at the time of booking of subject matter apartment it was agreed between the parties (clause 7.1 of the standard terms and conditions) that in cse of force majeure events including the events, the respondent would be entitled to extension of time without incurring any liability.

Clause 7.1 and 7.2 of the standard terms and conditions as agreed by the prospective buyer/customers/complainants provides that:

“7.1 The company/JIL shall make best efforts to deliver possession of the said premises to the applicant within the period more specifically described in the provisional allotment letter with a further grace period of 90 days. If the completion of the said premises is delayed by reasons of non-availability or scarcity of steel and/or cement and/or other building materials and/or water supply and for electric power and/or slow down, strike and/or due to dispute with the construction agency employed by the company, lock-out or civil commotion or nay militant action or by reason of war or enemy action or earthquake or any act of God or if non-delivery of possession is as a  result of  any law or as a result of any restrictions imposed by a Government Authority or delay in the sanction of building/zoning plans/grant of completion/occupation certificates by any Governmental Authority or for any other reason beyond the control of the Company hereinafter referred to  as “force Majeure Events” and each individual event referred to as a (force Majeure Event) the company/JIL shall be entitled to a reasonable extension of time for delivery of possession of the said premises.”

“7.2 Nothing contained herein shall be construed to give rise to any right to a claim by way of compensation/damages/ loss of profit or consequential losses against the company/JIL on account of delay in handing over possession for any of the aforesaid conditions beyond the control of the Company. If however the company/JIL fails to deliver possession of the

said premises within the stipulated period as mentioned herein above, and within the further grace period of 90 days thereafter, the applicant shall be entitled to compensation for delay thereafter @ Rs.5/- per sq. ft. per month for the super area of he said premises (“rebate”). The time consumed by the occurrences of force majure events shall be excluded while computing the time delay for the delivery of possession of the said premises.”

It is stated that a serious law and order problem occurred in various land parcels due to agitation by farmers. This restricted the peaceful development of the land given to the respondents. In the existence of continuing agitation and without support of the State to control the law and order despite requesting several times. Respondents were neither in a position to develop these lands nor in a position to sell it to raise finances to cater for the development of the project at Noida.

As per the concession agreement with the Government of UP, the Jaypee Infratech Limited was required to develop the Expressway from Noida to Agra and was to fund the cost of the project either through developing five townships or by sale of land.

The respondent started developing the project in Noida. The funding required for the development of the project was partly from sale of apartments and partly by sale of land at other land parcels. The funding by sale of land at other land parcels halted due to farmer’s agitation which led to a situation where the respondent could not even enter upon its land parcels and so could not realize the required funds for development for the already launched project. Whenever, the

respondent got some opportunity, it sold only a small part of land in Mirzapur land parcel and utilized the funds in the project at Noida. 

On 29.8.2014, the Government ordered for payment of additional incentive on 64.7% to farmers further restricted the respondent from entering its land parcels, leading to total scarcity of funds for development of the project.

After the increase in the compensation, the villagers stopped the work at the project stating that until they get increased compensation, no work will be allowed at the project. The respondent being aggrieved wrote several letters to the district administration and the State Government but no action was taken by them. This resulted in the land again becoming encumbered as neither it can be used for development nor it can be transferred till the time the issue of additional compensation is settled. Resultantly, the revenue generation of the respondent from the land stopped which resulted in delay.

Additionally, in the year 2012 the State Government decided not to handover the Expressway connecting Noida and Greater Noida to the respondent which was to be handed over to it as per the terms of the concession agreement with an entitlement to collect and appropriate the toll. This resulted in substantial loss of revenue to JIL, which revenue it would have generated and used for the development of the land parcels.

Apart from above, it is a well-known fact that there has been an overall economic slowdown which has not left real estate industry untouched.

Apart from the above, it is also relevant to mention herein that the Hon’ble National Green Tribunal (NGT) vide its order dated  11.1.2013 restrained all builders of Noida & Greater Noida, including the respondent, from extracting nay quantity of underground water for the purpose of construction or otherwise and the said  restriction is operative even today.

Apart from the above, it is also relevant to mention here that the National Green Tribunal vide its interim order dated 14.8.2013 in application no.158 of 2013 titled as “Amit Kumar vs. Union of India &ors.” interalia directed that:

“The applicant is directed to point out the identity of other buildings which are allegedly within the radius of 10 Km from Okhla Bird Sanctuary. The applicant also shall make serious attempt to identify the names of such builders and shall apply for impleading them by next date of hearing. In case the respondent no.6 will find during the course of such inspection that certain construction work is going on within 10 Km radius of Okhla Bird Sanctuary without obtaining proper Environmental Clearance or in contravention of the same then it shall be immediately stopped by making necessary panchanamas and by preparing status report.”

The said order was continued by order dated 17.9.2013 in the following terms:

“We make it clear that the earlier order restraining the construction without proper authority shall be implemented scrupulously and the respondent no.7 (District Magistrate) and respondent no.8 (Seniour Superintendent of Police) are directed to see the restriction is implemented and no further

construction are done in respect of 49 units and report the same by the next date of hearing.” 

The National Green Tribunal vide its interim order dated 28.10.2013 further modified its earlier orders as under:

“5. We make it clear that all the building constructions made within10 Km radius of the Okhla Bird Sanctuary of within distance of eco-sensitive zone as may be prescribed by the Notification issued by the MoEF shall be subject to the decision of the NBWL and till the time the clearance of NBWL is obtained, the authority concerned shall not issue completion certificates to projects.”

Subsequently, the National Green Tribunal vide its final order dated 3.4.2014 disposed of the said application interalia holding as under:

“In such view of the matter, we dispose of the application with the following directions:

1. The State of Uttar Pradesh shall send its response to the queries raised by MoEF within two weeks from the date of receipt of the copy of the order to the MoEF.
2. The State of Delhi as well as Haryana who are likely to be affected by fixation of eco-sensitive zone shall also send their proposals to the MoEF within four weeks from today.

3. After receipt of the said proposal as well as comments by the respective governments within the time stipulated above, we direct the Secretary, MoEF Government of India to call for the concerned officers of all the State Governments concerned and have interaction and decide finally about the fixation

of the eco-sensitive zoned in respect of Okhla Bird Sanctuary.

4. While such decision is taken, the secretary, MoEF in the said meeting shall take into consideration about the demarcation of boundaries in fixing the eco-sensitive zone apart from the issues as to whether it is site specific etc. While making such decision the Secretary, Ministry of Environment and Forest shall also make necessary consultations with the National Board for Wildlife.

5. After such decision is taken in the meeting convened by the MoEF, the concerned State Governments shall grant their consent within two weeks after the meeting. After such consent obtained, the Ministry of Environment and Forest shall issue necessary notification as per the powers conferred under the Environment Protection Act, 1986, expeditiously.
6. Till such notification is issued the interim order passed by this Tribunal as modified subsequently shall continue to be in operation.

7. It is needless to state that any decision taken by the Government in notifying the Eco-sensitive Zone shall be subject to the final decision of the Hon’ble Supreme Court in the matter pending before it.”

The respondent herein, thereafter filed an application being MA no.240 of 2014 for review/modification of the judgment and other dated 3.4.2014 in application no.158 of 2013 before the National Green Tribunal on 30.4.2014. However, the National Green Tribunal vide its judgment and order dated 30.5.2014 dismissed the application being M.A.

No.240 of 2014 for review/modification of the judgment and order dated 3.4.2014 passed by the National Green Tribunal.

Being aggrieved by the judgment and order dated 3.4.2014 passed in Original application no.158 of 2013 and judgment and order dated 30.5.2014 passed in review application being M.A. no.240 of 2014 in original application no.158 of 2013 passed by the National Green Tribunal, the respondents herein filed a civil appeal being 5822-5823 of 2014 before the Hon’ble Supreme Court and the Hon’ble Supreme Court vide its order dated 10.6.2014 declined to interfere with the orders passed by the National Green Tribunal and was pleased to dismiss the said Civil appeal filed by the respondent herein. 

In view of the aforesaid orders passed by the National Green Tribunal subsequently affirmed by the Hon’ble Supreme Court, the relevant authorities have been restrained from granting completion certificates to the respondent herein since 28.10.2013 till the time, the eco-sensitive zone is prescribed by the notification issue by the MoEF and consequent clearance is granted by the National Board of Wildlife. In view of the above, the respondent had to slow down the construction the construction and only when the said embargo has been removed, the construction has been resumed at its usual pace. Further till the completion certificate is granted to the respondents herein possession of said flat cannot be handed over to the complainant herein. In view of the same, the instant complaint is clearly devoid of any merit and is liable to be dismissed.

The aforesaid orders were in force from 14.8.2013 to 11.12.2015 (vide which the restrained in issuing completion

certificates was removed due to notification of eco-sensitive zone of Okhla Bird Sanctuary being issued by MoEF on 19.8.2015) which compelled the respondent to  go slow on construction due to total uncertainty in the mind of both the developer and the allottees. Despite the aforesaid embargoand  adverse conditions the respondents continued with the construction of the project including the apartments and tried to complete the project to the best of its abilities and has also completed the following infrastructure in Jaypee GeensWishtown, Noida:

1. Around 6000 apartments
2. A 500 bedded hospital
3. Higher Secondary School
4. Golf course 18 holes and 9 hole, shopping complex
5. All internal roads, electric, power back-up, water supply, sewer lines
6. Security infrastructure
7. Temporary club and
8. Parks.

It is stated that possession of the about 6000 apartments/units in the Jaypee Wishtown Project has been offered after the completion certificates were received from the Noida Authority. The respondents have already invested substantial sum of money in developing the infrastructure of the project as was informed in the brochure and in construction of various towers which are nearing completion.

Even otherwise, the respondents are duly paying delay compensation to the allottees who had been paying the demand raised on them as per the payment plan in terms of  clause 7.2 of the standard terms and conditions and therefore,

the prayers made in the instant complaint are clearly untenable as the complainant therein is trying to extort money towards excess interest beyond the agreed terms of the contract executed between the parties. Further, as has been established herein above, there is no fault on the part of the respondent herein and he delay has been only due to the orders passed by the National Green Tribunal subsequently affirmed by the Hon’ble Supreme Court as well as other factors not attributable to the respondent herein and therefore, the respondent cannot be directed to pay any compensation to the complainant herein.

In view of the above, it is submitted that the respondents are making their full endeavour to complete the construction of the said project at the earliest. However, if the complainant seeks to cancel the provisional allotment avail refund the same can only be done in terms of clause 9.1.5(b) of the standard terms and conditions. Clause 9.1.5 of the standard terms and conditions as agreed by the complainant provides that:

“9.1.5 (a) The applicant/allottee shall be entitled to cancel the provisional allotment only on default of the company/JIL to deliver up the said premises on payment of full consideration and other dues in accordance with the terms herein and provisional allotment letter. In such an event and upon the request of the applicant/allottee, the JIL shall refund without any interest or compensation whatsoever, the entire amount including Earnest Money as had been received from the applicant/allottee. 

(b) If the application/allottee for any other reason requests the company to cancel this provisional allotment in his favour,

the company may in its sole discretion permit such cancellation provided that the applicant/allottee compensates the company/JIL for any loss caused on account of  substituting another applicant/allotte in his/its/her place and stead (“Termination Charge”). The Termination Charge shall not include Earnest Money. In such cases, the Earnest money shall not be refunded.  

(c) Notwithstanding anything stated hereinabove, in the event the provisional allotment is terminated by the company under the terms of clauses 5.5 or clause 9.1.5(b) herein the entire amount of earnest money shall be forfeited by JIL. The balance installments paid by the applicant in accordance with the terms hereof shall first be used to satisfy the termination charge, which shall include land in any event not be less than the interest amounts setforth in clause l5.6 herein and the rest of the payments shall be refunded to the applicant without interest.”

It is submitted that respondent values the satisfaction of all its allottees immensely and therefore, at all times, respondents has been ready to provide all the necessary help and assistance to the complainant in a completely professional manner. Accordingly, respondents are committed to provide possession of the said unit to the complainant at the earliest and the delay caused was only due to reasons beyond the control of the respondents.      

In view of above, it is evident that the respondents have always acted in a bonafide manner and have acted in a professional and efficient manner keeping the best interests of its consumer in sight. It is therefore, incorrect to allege that the respondent has committed any deficiency in service. On

the other hand, it is the complainant who has filed the instant complaint as an afterthought, raising completely false and specious allegations in order to launch a malicious prosecution against the respondent herein and to extort illegal benefits on the basis of the same. Such illegal design of the complainant is clearly an abuse of the process of law and is liable to be rejected.

It is also denied that the respondent have committed any deficiency in service. Therefore, it is also denied that this Hon’ble Commission cannot award compensation damages or punitive damages against the respondents.

Further, it is submitted that respondents have taken all the required permissions from the concerned authorities in relation to the construction of the said sub project. Therefore, it is denied that the respondents influenced the mind of the complainant.  The construction of the said project got slowed due to force majeure events which are beyond the control of the respondents and not for any reason attributable to the respondents and therefore, the respondents are entitled for extension of time without incurring any liability as per clause 7.1 of the standard terms and conditions duly signed and agreed by the complainant.

The complainant with her free will and after making her independent enquiry and making herself completely aware about the said sub-project of the respondents, booked the said apartment unit subject to standard terms and conditions duly signed by her. Further it is submitted that respondents have taken all the required permissions form the concerned authorities in relation to the construction of the said sub-project and the said sub-project is approved by all the

government authorities, banks and financial institutions for all kind of loan facilities and no misrepresentation was made by the respondents to the complainant herein. 

It is submitted that the possession of the said unit could not be delivered in time due to force majeure events which are beyond the control of respondents and the complainant had agreed for extension of time in case of force majure events hampering the construction of the said sub-project. Further, it is submitted that timely payment of consideration as per the standard terms and conditions is the prerequisite of the contract and the complainants had agreed to the same at the time of making application form.

It is submitted that the complainant has not claimed the possession of the subject unit in the instant complaint and has only claimed the refund of amount paid by her alongwith interest and compensation towards the rent, compensation, damages in addition to the punitive damages with the cost of the case at exorbitant rates. Thus, it is crystal clear that the complainant is not interested in taking possession of the subject unit rather he wants to claim damages to generate profit only.

We have heard ld. Counsel for the complainant Mr. Piyush Mani Tripathi and ld. Counsel for the Opposite Parties Mr.  Pratul Pratap Singh. We perused the pleadings, evidence and documents on record.

This case has been filed under Consumer Protection Act 1986. First we have to see the aim and object of the Consumer Protection Act.

This Consumer Protection Act covers entire goods and services of all sectors that are public, private, or cooperative sectors, except those exempted by the central government. The act provides a floor for a consumer where one can file their complaint against the product and the forum takes an action against the concerned supplier and compensation is granted to the consumer for the inconvenience he/she has encountered. The main objects of the consumer protection act are ;

• To Provide better and all round protection to consumer.
• To Provide machinery for the speedy redressal of the grievances.
• To Create framework for consumers to seek redressal.
• To Provide rights to consumers.
• To Safeguarde rights of Consumers.

Let us know more about the rights and responsiblities of consumer . Listed below are the Rights of the Consumer

• Right to Safety- Before buying, a consumer can examine on the quality and guarantee of the goods and opt for ISI or AGMARK products.
• Right to Choose- Consumer must have the right to choose from a variety and number of goods and in a competitive price
• Right to be informed- The buyers must be provided with complete information with all the necessary and adequate details of the product, make her/him act wise, and change the buying decision.
• Right to Consumer Education- The consumer must be aware of his/her rights and avoid exploitation.
• Right to be heard- The consumer will get due attention to express their grievances at a suitable platform.
• Right to seek compensation- The consumer has the right to seek or ask for redressal against unfair and inhumane practices or exploitation of the consumer.

Listed below the responsibilities of the consumers

• Responsibility to be aware – A consumer has to be careful of the safety and quality of products and services before purchasing.
• Responsibility to think independently– Consumer should be well bothered about what they want and need and hence make independent choices.
• Responsibility to speak out- The buyer should be fearless to speak out their problems and tell to traders what they exactly want
• Responsibility to complain- It becomes the consumer’s responsibility to express and file a complaint about their dissatisfaction with goods or services in a sincere and fair manner.
• Responsibility to be an Ethical Consumer- Consumer must be fair and not engage themselves with any deceptive practice.

The Consumer Protection Act 1986 was enacted to provide for better protection of the interests of consumers and for that purpose to make provision for the establishment of Consumers Councils and other authorities for the settlement of consumers’ disputes and for matters connected therewith (Preamble).

The Act Inter alia, seeks to promote and protect the rights of consumers such as —

• right to be protected against marketing of goods which are hazardous to life and property;

(2) right to be informed about the quality, quantity, potency, purity, standard and price of goods to protect the consumer against unfair trade practices;

(3) right to be assured, wherever possible, access to variety of goods at competitive prices;

(4) right to be heard and to assured that customers’ interests will receive due consideration at appropriate forums.

(5) Right to seek redressal against unfair practices or unscrupulous exploitation of consumers; and

(6) Right to consumer education

The objects are sought to be promoted and protected by the Consumer Protection Councils to be established at the Central and State levels.

The Act applies to all goods and services, except if otherwise provided by the Central Government by Notification. To provide speedy and simple redressal of consumer disputes, a quasi judicial machinery is set up at the District, State and Central levels. The three tier system of quasi judicial bodies will observe the principle of natural justice and are empowered to give relief of a specific nature and to award, wherever appropriate, compensation to consumers. Penalties for non-compliance of the orders given by the quasi judicial bodies have also been provided.

Thus the Consumer Protection Act is to serve the interests of the consumers. Consumer education and redressal of consumers’ grievances are the two aspects of the Act. It makes good the loss a consumer suffers and increases the feeling of responsibility of the manufacturer, trader, supplier or businessman.

The provisions of the Act have to be construed in favor of the consumer to achieve the purpose of enactment as it is social benefit oriented legislation. The primary duty of the Court while construing the provisions of such an Act is to adopt a constructive approach subject to that it should not do violence to the language of the provisions and not contrary to attempted objective of the enactment.

Extent of Consumer Protection:

While other legislations may be either punitive or preventive, the Consumer Protection Act compensates the consumer. The provisions of the Act are in addition to and not in derogation of the provisions of any law at the time being in force (Sec 3). In Maine Container Services South Pvt Ltd v Go Garments 1998 (3) SCC 247 it has been held that the Contract Act applies to all litigants before the Commissioner under the Consumers Protection Act. Passengers traveling in train suffering injuries and loss of Jewelry as a result of assault by unruly crowd are eligible for filing of complaint before State Commission is maintainable notwithstanding the provisions of sections 100 and 103 of Railways Act, 1889. The Consumer Protection Act therefore gives the consumer an additional remedy besides those which may be available under other existing laws. Existence of an arbitration clause in the agreement is no bar to the entertainment of complaint by the Redressal Agency as the remedy under the Act is in addition to the provisions of any other law. However, the Consumer Forums under the Act have not taken over the jurisdiction of civil Courts. If the dispute between the parties is pending in Civil Court no Consumer Forum will adjudicate the dispute. Similarly if evidence be laid by the parties to the dispute is voluminous or complicated the parties will be referred to the appropriate Civil Court.

Consumers Protection Act, thus enshrines the rights of a consumer to be informed about the quality, quantity, potency, price etc., of the goods to be protected against unfair trade practices, to seek inexpensive and expeditious redressal of grievances before the Consumer Forums. Consumer Protection Act is a benevolent piece of legislation to protect a large body of consumers from exploitation.

With the passage of time, the populace of the country is on hike and so are their opinions. Their opinion forms the basis for their interpretation, it may be a good or a bad interpretation. What would happen in the situation where people starting interpreting the laws? We might be flooded with several interpretations. The interpretations will be in such huge number that the laws will become unclear. This is the reason why lawmakers, while making the law, formulate it in accordance with the aim, set out by them, before penning down the legislations. The aim of any legislation defines the basis of the act. It becomes the ground norm of the act, based upon which the judiciary interprets the disputed texts.

The aim of any act forms the indispensable element, because it acts as the cord that delivers the real intention of the legislators behind the act.  Whenever there is clash between two legislations, it is the aim of the legislation which makes the judges to derive at the endpoint in deciding which law has the superseding effect. It is through the doctrine of pith and substance that judges are able to derive at the major inclination towards one act over another act. This inclination is decided on the basis of the aim/goal of the act and the facts of that particular case.

Now the next question is regarding Arbitration Clause no 10.9 in the agreed terms and conditions for. It is argued by the opposite party that the matter should have been referred to an arbitrator. As far as Arbitration Act and Consumer Protection Act are concerned the following article and case laws will help to understand the dominance of the act.

RELATIONSHIP BETWEEN ARBITRATION ACT AND CPA

In India, people are least aware with the consumer’s rights and lags behind having low general understanding of arbitration as dispute resolution mechanism. The arbitration clause can curtail the grounds on which the consumers can raise the disputes, whereas on the other side the consumer protection act may grant the consumer various grounds on which he can file the complaint which may not be otherwise permitted in the standard form agreement having the arbitration clause.

Arbitration has equal bargaining powers and the resources at hand which makes it private, efficacious, and timely form of dispute resolution. Whereas in case of consumer disputes, the case is different, where they are exposed to the standard form agreements making them submit to the unfair or the repressive terms. They are several times made part of the one-sided arbitration clause, which is drafted keeping in mind the interest of one party only.

These days Indians are shifting to the online purchasing platform and being ignorant of not checking the agreements which makes them to be covered under the blanket provision and end up being the party to the arbitration. This makes less options opened for the consumer to resort to the statutory remedies which in turns endangers the interest of the consumers. This may also build the hostile market against the e-commerce in India. It may have the adverse effect not only on the Indian economy but also on the e-commerce giants who aims at invest in the growing market.

CONSUMER COURT AS A SPECIAL COURT

It was held in the case of Aftab Singh v Emaar MGF Land Limited &Anr., that the provisions of the arbitration act does not apply to the consumer courts, as they are the special courts set up for the public purpose. In this case, the group of the home owners filed the complaint against Emaar MGF Land Private Limited (Builder) before NCDRC. The complaint was filed for the non-delivering the plots to the buyers as per the Buyers’ Agreement. The builder filed the application under section 8 of the Arbitration and Conciliation Act, on the basis of the arbitration agreement made between the parties which was mentioned there in the Buyer’s Agreement.

It was argued by the petitioner that the remedies provided under the Consumer Protection Act are not in exclusion of the existing laws, but are in addition to it, which has been sated in the case of National Seed Corporation Limited v M. MadhusudhanReddy( (2012) 2 SCC 506 ) . It was also argued that the consumer protection act is the piece of the legislation which intends to confer the benefits and it is the, for which the purpose should be advanced. Therefore, regardless of having entered into the arbitration clause, the consumer can invoke the section 3 of the Consumer Protection Act and bring the complaint to the consumer forum( Skypak Couriers Ltd. Vs. Tata Chemicals Ltd)Booz Allen Hamilton Inc v. SBI Home Finance Ltd(2011) 5 SCC 532), which provided the country with the disputes that are not arbitrable. In this case, Supreme Court, came with the 7 categories of the disputes that are not arbitrableA. Ayyasamy v. A Paramasivam(2016)10 SCC 386 ;N. Radhakrishnan v. Maestro Engineers) that the dispute will not be arbitrable if the civil court’s jurisdiction has been exclusively given to a tribunal or the special court. The Consumer Courts were made to create an organized system for dispute between the people who possess the unequal power i.e. the consumer and the large corporations. The commission also pointed out the section 2(3) of the Arbitration and Conciliation Act which refers to the situations where the special categories of disputes are protected from being referred to the arbitration. Therefore this provision protects the Consumer disputes. The court concluded that if the court allows party to go for the arbitration and being in favor of the builder, it will defeat the goals and the main purpose of the Consumer Protection Act.

THE CONDITIONS PRIOR AND POST 2015 AMENDMENT TO SECTION 8 OF ARBITRATION AND CONCILIATION ACT

Section 8 of the Arbitration and Conciliation Act states that the judicial authority can instruct the parties to go for arbitration in the case when there exists the arbitration clause in the arbitration agreement. It does not bars oust the jurisdiction of the Consumer Court, it will continue to hold and enjoy the jurisdiction irrespective of presence of an arbitration clause in the agreement.

The Supreme Court contented that there was no legislative intent of the amended provisions of the section 8(1) in the Arbitration and Conciliation Act, so as to override the other statutes which have the specific remedies. Neither it intends to make disputes related to trusts, criminal law, tenancy, telecom, family law, IPR, etc, as the arbitrable subject and to against the judgement of A Ayyasamy v A Parasivam&Ors(2016) 10 SCC 729 ) and Booz Allen Hamilton Inc. v SBI Home Finance Limited &Ors.(2011) 5 SCC 532 )

Supreme Court analyzed the situations prior to 2015 Amendment, related to referring the consumer disputes to arbitration. Supreme Court referred to the judgmentsprior 2015 which had the settled law in cases of Fair Air Engineering Pvt. Ltd &Anr V N K Modi (1996) 6  the SCC 385), National Seeds Corporation Limited v Madhusudhan Reddy &Anr (2012) 2 SCC 506) and Rosedale Developers Private Limited V Aghor Bhattacharya &Ors (2018) 11 SCC 337). These cases held that even if the dispute arise from the contract having the arbitration clause, it will not impede the parties to resort to file a complaint before the consumer forum under Consumer Protection Act. All of the judgements had the rationale that provision of section 3 of Consumer Protection Act states that “the provision is in addition to, and not in the derogation of any other law for the time being in force.”

The Supreme Court acknowledged the 2015 amendment which restricted the power of any judicial authority to refuse to refer the dispute to arbitration under section 8(1) and appointment of arbitrator under section 11(6A) and also acknowledged the fact that it invalidated the earlier precedent in the case of Sukanya Holding (P) Ltd v Jayesh H Pandya &Anr.( 2003) 5 SCC 531) Supreme Court considering section 2(3) of the arbitration act, states that the Part I of the arbitration act shall not affect any other law for the time being in force, by virtue of which certain disputes may not be submitted to the arbitration. Supreme Court stated that the legislative intent of 2015 Amendment was never to override section 2(3) of the Arbitration Act and other statute which offers the public remedy like that of CPA.The Supreme Court in 1994 already held that CPA is a beneficial legislation which provides the economical and expeditious remedies to the aggrieved consumer in the case of Lucknow Development Act V M K Gupta(1994) 1 SCC 243).

Referring to all of the above cases, the Supreme Court in this case affirmed that the decision given by NCDRC is valid and stated that the consumer dispute are the subject matter where the dispute cannot be referred to arbitration as it pertains to rights in rem (public rights). It comes under the ambit of the non-arbitrable dispute defined under Booz Allen and Ayyasamy case. The disputes are non-arbitrable in disputes related to criminal laws, tenancy, trusts, family law, telecom, IPR, insolvency and winding up, and in certain cases, fraud.

CONCLUSION AND CRITICS OF THE CASE

It can be ensured with the judgement that consumers who have lesser bargaining power than that of the service providers shall not be pushed towards the relatively cumbersome process of the arbitration where there can be other more affordable and efficacious low public law remedies available. The CPA is a special legislation which has the public law remedies dealing with the rights under the umbrella of “right in rem” which has been espoused by Booz Allen. The case had many critics for it, as it was delivered during the course of time, when India has been continuously focusing upon the survival and the supremacy of the arbitration proceeding over litigation in the Indian dispute resolution. And it was the major reason that it appeared for some of the people as a diversion from the object of Indian arbitration system to be an arbitration-friendly hub. This also draws our attention towards the fact that the arbitration shall be made a more consumer-friendly method of dispute resolution. It is because of this judgement that people were able to depict the heightened element of the public interest consumer dispute in India.

So it is clear that The Consumer Protection Act is a special type of act and even if there is a clause of arbitrator in the application form, it will not oust the jurisdiction of the consumer courts. So this court has jurisdiction to try the case.

It is also clear that the complainant has deposited a good amount of money towards this flat. In the provisional allotment letter dtd 16.04.2012 the opposite party has promised to deliver the possession of the said within 42 months meaning thereby that the possession was to be given by 15 October 2015. The opposite party failed to honour his promise. Now the opposite party has brought the story of Yamuna Express way, story of Jayprakash associates and infratecetcetc .Provisional allotment letter dtd 16.04.2012 has been issued jointly by Jaiprakash Associates Ltd and Jaypee Infra Tech Ltd , meaning thereby that both the firm jointly and severally liable for this transaction. Now the story of moratorium etc in relation to Jaypee Infra Tech Ltd has nothing to do with this joint responsibility. Jaiprakash Infratech Ltd has issued the receipts of deposits so he has collected the money from the complainant and if Jaiprakash Infratech Ltd comes in picture and collect money, the matter rates between those two individuals and not between complainant and opposite parties.

In the light of above mentioned facts we have to see the latest judicial pronouncement of Hon’ble NCDRC  in First Appeal  no 380 of 2019 , Judgement dated  26.09.22 Jaiprakash associates Ltd Vs Deepti  Kumar & two ors. In this case the matter rates to “ Garden Isles” and in the present case the matter also relates to “ Garden Isles” . Both these Isles are same and situated in JP Greens .Soit is clear that the Hon’ble NCDRC has dealt with one of the same matter and pronounced its judgement which is very important in the present circumstances of the case. The Hon’ble NCDRC has held in this case ,

1. “ThecomplainantstatedthatJaypeeInfratechLimited(respondent-2)andJaiprakashAssociatesLimited(theappellant)(hereinafterreferredtoasthebuilders)werecompanies,registeredunderCompaniesAct,1956andengagedinthebusinessofdevelopingandconstructinggrouphousingproject.Theylaunchedagrouphousingprojectinthenameof“GardenIsles”atJaypeeGreens,Sector-131&133,Noidaandmadewidepublicityintheyear2011.Alluredwithlucrativeadvertisementsandbelievingonit,thecomplainantappliedforaflatanddepositedtherequiredmoneyofRs.2.5/-lacson06.02.2012.ThebuildersprovisionallyallottedUnitNo.-GDI25-2103(superarea1205sq.ft.,BasicSalePriceofRs.4359690/-TotalConsiderationofRs.4898890/-,includingRs.2.5/-lacsforCarParkingSpace)on16.05.2012.Undertheallotmentletterdated16.05.2012,thebuilderspromisedtodeliverpossessionwithin42monthsfromthedateofallotment.Thebuildersprovidedsubventionscheme,underwhich,loanwasadvancedfromAxisBankLimited(oppositeparty-3).Aquadripartiteagreementdated29.06.2012wasexecutedbetweenthepartiesandAxisBankLimiteddirectlyadvancedRs.3889200/-on03.08.2012tothebuilders.ThecomplainantpaidRs.490000/-on18.06.2012,Rs.134233/-onRs.29.08.2012andRs.12847/-on28.03.2013(totalRs.4776280/-includingloanamount).The

periodof42monthsexpiredon16.11.2015andgraceperiodof180daysasgivenunderClause-

7.2ofStandardTermsandConditionsexpiredon16.05.2016.ThebuildersdidnotgiveanyinformationregardingprogressoftheconstructionnorofferedpossessiontillthenandpaiddelayedcompensationasperClause-7.2.Thecomplainant,videletterdated01.09.2016inquiredaboutdateofdeliverypossessionandrequestedforpaymentofdelayedcompensationbutthebuildersdidnotrespond.Thenthecomplaintwasfiled,claimingdeficiencyinserviceandunfairtradepractice.

2. TheappellantandJaypeeInfratechLimited(respondent-2)fileditsjointwrittenreplyinthecomplaint,inwhich,materialfactsrelatingbooking/allotmentoftheflatandpaymentsmadebythecomplainant,includingmoneyadvancedbyAxisBankLimitedhavenotbeendisputed.However,theytookpleathatthecomplainantmadepaymentwithdelayforwhich,shewasliabletopayinterestofRs.78515/-.Theydeniedofcommittingdeficiencyinserviceandunfairtradepractice.TheystatedthatTajExpresswayProjectwasconceivedbyGovernmentofU.P.,intheyear2002,forconnectingNoidatoAgra.Theprojectalsoenvisageddevelopmentof25millionSq.Mtrs.landalongwiththeexpresswayon“Build-Operate-Transfer”basis,forwhichbidswereinvited.BidofM/s.JaiprakashIndustriesLimitedwaslowestassuchtheprojectwasawardedtoitandConcessionAgreementdated07.02.2003wasexecutedbetweenTajExpresswayAuthority(nowrenamedasYamunaExpresswayIndustrialDevelopmentAuthority)andM/s.JaiprakashIndustriesLimited.Byaschemeofamalgamation,approvedbyAllahabadHighCourt,videorderdated10.03.2004,M/s.JaiprakashIndustriesLimitedwasamalgamatedwithJaypeeCementLimitedw.e.f.01.04.2002andthenameofJaypeeCementLimitedwaschangedasJaiprakashAssociatesLimitedw.e.f.11.03.2004.StateofU.P.appointedanEnquiryCommissionofJusticeSiddheshwarNarayan(retd.)tolookintotheConcessionAgreement.Hesubmittedhisreportdated12.10.2006,recommending,setupaSpecialPurposeVehicle,forthepurposesofcarryingouttheproject.AsperdirectionofYamunaExpresswayIndustrialDevelopmentAuthority,inthelettersdated06.11.2006and15.02.2007,JaypeeInfratechLimitedwasincorporatedon05.04.2007asaSpecialPurposeVehicleforcompletionoftheproject.ByProjectTransferAgreementdated19.10.2007(registeredon17.12.2007),thedevelopmentworkoftheprojectofexpresswayfromNoidatoAgrawasassignedtoJaypeeInfratechLimited,whowasrequiredtofundtheProjectbydevelopmentandsaleofflats/landinfivetownships.Entirelandfordevelopmentatfivelocations,includingthelandofJaypeeGreensWishTownProjectwasleasedtoJaypeeInfratechLimitedon27.11.2007.ADevelopmentAgreementdated01.05.2009wasexecutedbetweenJaypeeInfratechLimitedandJaiprakashAssociatesLimited,underwhichtaskofdevelopment,construction,marketing,saleetc.wereassignedtoJaiprakashAssociatesLimited.Afterobtainingnecessaryapproval,developmentworkofthe“GardenIsles”wasstarted.However,forthereasonsbeyondtheircontroli.e.duetoforcemajeureevents,viz.shortageoflabour,scarcityofwater,restrictionsinexcavations,villager’sagitations,legalimpedimentsetc.,theconstructionwasdelayed.Thefundingofthedevelopmentoftheprojecthadtobedonepartlyfromsaleofapartmentandpartlyfromsaleofland.Intheyear2010,saleofparcelsoflandwashaltedandseriouslawandorderproblemwascreatedduetofarmer’sagitation.Governmentof U.P.issuedorderdated29.08.2014forpaymentofadditionalincentiveof64%tothefarmers,whichresultedtotalscarcityoffundsfordevelopmentoftheproject.Thevillagersstoppedtheworkofdevelopmenttillpaymentoftheamount.StateGovernmentdecidednottohandovertheExpresswayconnectingNoidaandGreaterNoidatothebuildersin2012,resultingsubstantialloss

ofrevenuetoJaypeeInfratechLimited.NationalGreenTribunal,videorderdated11.01.2013,restrainedallthebuildersofNoidaandGreaterNoidafromextractingundergroundwater.

NationalGreenTribunalvideorderdated14.08.2013,restrainedallconstructionworkswithinaradiusof10kmfromOkhlaBirdSanctuaryandvideorderdated28.10.2013restrainedtheauthoritiesfromgrantingcompletioncertificatetoanybuilding.Byanorderdated03.04.2014directedtheauthoritiestocreateaneco-sensitivezoneforOkhlaBirdSanctuary.Thebuildersfiled M.A.No.240of2014formodificationoftheorderdated03.04.2014,whichwasrejectedon30.05.2014.AgainsttheseordersCivilAppealNos.5822-5823of2014werefiled,whichweredismissedbySupremeCourton10.06.2014.StateGovernmentnotifiedeco-sensitivezoneon19.08.2015.UnderClauses-7.1and7.2ofStandardTermsandConditions,thebuilderswereentitledforextensionofperiodforwhichtheconstructionwasobstructedduetoforcemajeurecauses.ThebuildersgaveadiscountofRs.327760/-tothecomplainantasperClause-7.2ofStandardTermsandConditionsandthebuildersthroughoutactedinfairandbonafidemanner.Therewasnounfairtradepractice.ThebuilderswerereadytorefundtheamountasperStandardTermsandConditions.Thebuilderswereknownfortheirqualityandcommitmentandtheyweretryingtocompletetheprojectandhandoverpossessionattheearliest.Thepreliminaryissuesthatthecomplainanthadbookedtheflatforcommercialpurpose,asisprovedfromthefactthatduetodownfallofmarketinrealestate,thecomplaintwasfiledforrefundofmoneyandnotforpossessionandsheisnotaconsumerandStandardTermsandConditionscontainedanarbitrationclauseandsheberelegatedforarbitration,havealsobeenraised.”

“ 9. ThecounselfortheappellantsubmittedthatNationalCompanyLawTribunal,AllahabadhasdeclaredmoratoriumagainstJaypeeInfratechLimited,videorderdated09.08.2017undertheCode,2016andtheproceedingisstillgoingon.Section-63barsjurisdictionofCivilCourtandbyvirtueofSection238,theprovisionsoftheCode,2016haveoverridingeffect.SupremeCourtinHirakundIndustrialWorksVs.VarshaFabrics(P)Ltd.(2020)14SCC198andGhanshyamMishraandsons.Pvt.Ltd.Vs.EdelweissARCLtd.(2021)9SCC657,heldthattheprovisionsoftheCode,2016hadoverridingeffectoverallotherstatuteincludingConsumerProtectionAct,1986.TheremedyofthehomebuyeristosubmithisclaimbeforeInterimResolutionProfessional.DeeptiKumar(respondent-1)hassubmittedherclaimofRs.4776280/-alongwithinterest,on21.08.2017beforeInterimResolutionProfessional.Homebuyersare‘financialcreditors’withinthemeaningofSection5(7)readwithExplanationtoSection5(8)(f)oftheCode,2016.CommitteeofCreditorsapprovedtheplanofSurakshaRealtyLimitedon09.07.2021,underwhich,SurakshaRealtyLimitedproposedtocompletetheprojectwithin40monthsandthehomebuyerswouldbegivenpossessionoftheirflatwithoutanydelayedcompensation.Resolutionofapprovaloftheplanisbindingonall‘financialcreditors’.Inviewofmoratoriumdated09.08.2017,StateCommissionoughttohaveabatedtheproceedingofthecomplaintbeforeit.SomeofthehomebuyersfiledwritpetitionbeforeSupremeCourt,i.e.inChitraSharmaandothersVs.UnionofIndiaandothers,(2018)18SCC575,byfinalorder,SupremeCourtdeclinedtodisbursetheamountdepositedbytheappellanttothehomebuyersofJaypeeInfratechLimited,holdingthathomebuyerswere‘financialcreditors’andmemberofCommitteeofCreditorsanddirectingthemtosubmittheirclaimbeforeInterimResolutionProfessional.SupremeCourtinInnoventiveIndustriesLimitedVs.ICICIBankandanr.,(2018)1SCC407,heldthattheCode,2016isacompletecode.UnderSection-28oftheCode,2016,CommitteeofCreditorssupervisestheaffairsofInterimResolutionProfessional,inrespectofcorporatedebtor.UnderSection30(4)oftheCode,2016,theresolutionplanhastobeapprovedbyCommitteeofCreditorsbyamajorityvotingshareofatleast66%.Inthepresentcase,thereweremorethan21000homebuyer’svotes.CommitteeofCreditorshasapprovedtheplanofSurakshaRealtyLimitedon09.07.2021,underwhich,homebuyerwouldbegivenpossessionoftheirflat.ThisisbindinguponthemasheldbySupremeCourtinJaypeeKensingtonBoulevardApartmentWelfareAssociationandothersVs.NBCC(India)Ltd.andors.,(2021)SCCOnLineSC253.InCommitteeofCreditorsofEssarSteelIndiaLtd.Vs.SatishKumarGupta,(2020)8SCC531,heldthatCommitteeofCreditorsalonesdeterminesitsfeasibilityandviabilitybasedonitsowncommercialwisdom.EvenNationalCompanyLawTribunalhaslimitedjurisdictiontointerferewiththeapprovedplan.ItisnotopenforthehomebuyertoclaimflatfromJaypeeInfratechLimitedandalsotakerefundfromJayprakashAssociatesLimited.SupremeCourtinSAILVs.UnionofIndia,(2006)12SCC233,heldthatalitigantisestoppedfromraisinginconsistentandmutuallydestructiveplea.RelyinguponDevelopmentAgreementdated01.05.2009,executedbetweenJaypeeInfratechLimitedandJaiprakashAssociatesLimited,inwhichtaskofdevelopment,construction,marketing,saleetc.wereassignedtoJaiprakashAssociatesLimitedaswellasvariousclausesofprovisionalallotmentletterandStandardTermsandCondition,ithasbeensubmittedthatJaiprakashAssociatesLimitedwasanagentofJaypeeInfratechLimited.ThehomebuyerpaidentiremoneytoJaypeeInfratechLimited.ThisCommissionhastakenviewthattheperson,whohadreceivedmoney,wasliabletoreturnit.In viewofSection230ofContractAct,1872,recoveryproceedingcannotbeinitiated/continuedagainstanagentfortheactsofadisclosedprincipal.HerelieduponthejudgmentsinMarineContainerServicesSouthPvt.Ltd.Vs.GoGoGarments,(1998)3SCC247,PremNathMotorsVs.AnuragMittal,(2009)16SCC274,VivekAutomobilesVs.IndianInc.,(2009)17SCC657,forthepropositionthatanagentcannotbeheldliablefortheactsofadisclosedprincipal.Clause-9.1.5ofStandardTermsandConditionsprovidesforreturnofthemoneywithoutanyinterestorcompensationandearnestmoney.StateCommissionhasillegallydirectedforpaymentofinterest@18%perannum.DelaywascausedforthereasonsofforcemajeureandtheperiodwasliabletobeextendedunderCluase-7.1ofStandardTermsandConditions.ThejudgmentsofthisCommissioninCC/1495/2015,ArvindDhingraVs.JAL(decidedon01.10.2018)hasbeensetasidebySupremeCourt.CC/2194/2016AnishSinghalVs.JAL(decidedon01.10.2019)wasnotrelatedtotheprojectofJaypeeInfratechLimited.JudgementinCC/11320-11329/2018GauravGoel&anr.vs.JALwaschallengedinCivilAppealDiaryNo.

5804of2020,whichwasdecidedintermsofsettlementvideorderdated25.10.2021.JudgmentinCC/976/2017RajeevKumarSinghVs.JAL,(decidedon15.06.2020)hasbeenstayedbySupremeCourtinCivilAppealNo.4724-4725of2021,videorderdated16.08.2021.Noneofthesejudgmentscanbeconsideredasbindingprecedent.JudgmentofAnjaliRathiVs.TodayHomes,(2021)SCCOnLineSC729,isdistinguishableasthepromoterhadgivenundertakingbeforeSupremeCourttobeartheliability,inthatcase.

10. ThecomplainantdoesnotdisputethatNationalCompanyLawTribunal,AllahabadhasdeclaredmoratoriumagainstJaypeeInfratechLimited,videorderdated09.08.2017undertheCode,2016andtheproceedingwasgoingon.However,thecomplainantarguedthatJaiprakashAssociatesLimitedwasoneofajointpromisorassuchheisseverallyliabletorefundtheamountunderSection43oftheContractAct,1872.JaiprakashAssociatesLimitedwasthe‘promoter”asdefinedundertheRealEstate(RegulationandDevelopment)Act,2016andthecomplainantisentitledtoclaimrefundofmoneyfromhimunderSection19(4)ofthisAct.ThecomplaintisnotliabletobeabatedduetopendencyofinsolvencyproceedingagainstJaypeeInfratechLimitedastheappellantisindependentlyliabletoreturnthemoney.

13. UnderSection-14(a),institutionofsuitetc.againstcorporatedebtorcanbeprohibitedwhileunderSection-14(b)prohibitioncanbeimposeduponthecorporatedebtorfromtransferringetc.itsassets.SupremeCourtinChitraSharmaandothersVs.UnionofIndiaandothers,(2018)18SCC575andJaypeeKensingtonBoulevardApartmentWelfareAssociationandothersVs.NBCC(India)Ltd.andors.,(2021)SCCOnLineSC253.,didnotheldthattheproceedingagainsttheappellantforrefundofmoneyisliabletobeabated/stayedduetopendencyofproceedingundertheCode,2016,againstJaypeeInfratechLimited.Innoneofthecases,relieduponbytheappellant,ithasbeenheldthattheproceedingagainstapromoterorco-promisorforrefundisliabletobeabated/stayedduetopendencyofproceedingundertheCode,2016,againstJaypeeInfratechLimited.AforesaidprovisionsoftheCode,2016barsuitetc.againstcorporatedebtoronlynotagainsttheappellant,whowasnotacorporatedebtor.

15. Section43oftheContractAct,1872andtherelevantprovisionsoftheRealEstate(RegulationandDevelopment)Act,2016arequotedblow:-.

“Section43.Anyoneofjointpromisorsmaybecompelledtoperform-Whentwoormorepersonsmakeajointpromise,thepromisemay,intheabsenceofexpressagreementtothecontrary,compelany[oneormore]ofsuchjointpromisorstoperformthewholeofthepromise.

Eachpromisormaycompelcontribution.-Eachoftwoormorejointpromisorsmaycompeleveryotherjointpromisortocontributeequallywithhimselftotheperformanceofthepromise,unlessacontraryintentionappearsfromthecontract.

Sharing of loss by default in contributions.-if any one of two or more joint promisors makesdefault in such contribution, the remaining joint promisors must bear the loss arising from suchdefaultinequalshares.

Explanation-Nothinginthissectionshallpreventasuretyfromrecovering,fromhisprincipal,paymentsmadebythesuretyonbehalfoftheprincipal,orentitletheprincipaltorecoveranythingfromthesuretyonaccountofpaymentmadebytheprincipal.

TheRealEstate(RegulationandDevelopment)Act,2016

Section:2(zk)“promoter”means,—

1. apersonwhoconstructsorcausestobeconstructedanindependentbuildingorabuildingconsistingofapartments,orconvertsanexistingbuildingorapartthereofintoapartments,forthepurposeofsellingallorsomeoftheapartmentstootherpersonsandincludeshisassignees;or

2. apersonwhodevelopslandintoaproject,whetherornotthepersonalsoconstructsstructuresonanyoftheplots,forthepurposeofsellingtootherpersonsallorsomeoftheplotsinthesaidproject,whetherwithorwithoutstructuresthereon;or

3. anydevelopmentauthorityoranyotherpublicbodyinrespectofallotteesof—(a)buildingsorapartments,asthecasemaybe,constructedbysuchauthorityorbodyonlandsownedbythemorplacedattheirdisposalbytheGovernment;or

(b)plotsownedbysuchauthorityorbodyorplacedattheirdisposalbytheGovernment,

forthepurposeofsellingallorsomeoftheapartmentsorplots;or(iv)anapexStatelevelco-operativehousingfinancesocietyandaprimaryco-operativehousingsocietywhichconstructsapartmentsorbuildingsforitsMembersorinrespectoftheallotteesofsuchapartmentsorbuildings;or

5. anyotherpersonwhoactshimselfasabuilder,coloniser,contractor,developer,estatedeveloperorbyanyothernameorclaimstobeactingastheholderofapowerofattorneyfromtheownerofthelandonwhichthebuildingorapartmentisconstructedorplotisdevelopedforsale;or

6. suchotherpersonwhoconstructsanybuildingorapartmentforsaletothegeneralpublic.

Explanation.—Forthepurposesofthisclause,wherethepersonwhoconstructsorconvertsabuildingintoapartmentsordevelopsaplotforsaleandthepersonwhosellsapartmentsorplots

aredifferentperson,bothofthemshallbedeemedtobethepromotersandshallbejointlyliableassuchforthefunctionsandresponsibilitiesspecifiedunderthisActortherulesandregulationsmadethereunder;”

Section19.Rightsanddutiesofallottees;(1)…………

(2)………………..

(3)…………………

(4)TheallotteeshallbeentitledtoclaimtherefundofamountpaidalongwithinterestatsuchrateasmaybeprescribedandcompensationinthemannerasprovidedunderthisAct,fromthepromoter,ifthepromoterfailstocomplyorisunabletogivepossessionoftheapartment,plotorbuilding,asthecasemaybe,inaccordancewiththetermsofagreementforsaleorduetodiscontinuanceofhisbusinessasadeveloperonaccountofsuspensionorrevocationofhisregistrationundertheprovisionsofthisActortherulesorregulationsmadethereunder.

16. . UnderDevelopmentAgreementdated01.05.2009,taskofdevelopment,construction,marketing,saleetc.ofthevariousprojectsofJaypeeInfratechLimitedwereassignedtoJaiprakashAssociatesLimited,whowasalsosharingtheprofitoncostplusbasis.UnderProvisionalallotmentletterandStandardTermsandConditions,JaiprakashAssociatesLimitedhaspowertocancelallotmentofthehomebuyer.Inparagraph-8(ii)ofthewrittenreply,theappellanthasstatedthatJaypeeInfratechLimitedwasitssubsidiarycompany.Inparagraph-2ofmemorandumofappeal,theappellantclaimedtobeholdingcompanyofJaypeeInfratechLimited.However,theappellantarguedthatitwasanagentofJaypeeInfratechLimitedunderDevelopmentAgreement.

17. TheRealEstate(RegulationandDevelopment)Act,2016,hasbeenenactedtoprovidebetterprotectiontothehomebuyersinefficientandtransparentmanner.TheappellantfallswithinthedefinitionofthepromoterunderthisAct.ThehomebuyerisentitledtoclaimrefundofmoneywithinterestfromtheappellantunderSection-19(4)oftheRealEstate(RegulationandDevelopment)Act,2016.TheprovisionsoftheCode,2016donotbarinitiationofproceedinganditscontinuationforrefundagainstthepromoter.RealEstate(RegulationandDevelopment)Act,2016isaspeciallaw.Evenif,forthesakeofarguments,itistakenthattheappellantwasanagentofJaypeeInfratechLimitedundertheDevelopmentAgreement,thenalsotheappellantisfallingwithinthedefinitionof“promoter”asgivenunderRealEstate(RegulationandDevelopment)Act,2016.SpecialLawwillprevailovergenerallawasheldbySupremeCourtinVodaphoneIdeaCellularLtd.Vs.AjayKumarAgrawal,(2022)6SCC496.ThepositionoftheappellantaspromoterandliabilitytorefundSection-19(6)ofRealEstate(RegulationandDevelopment)Act,2016willoverrideoveritspositionasanagentofJaiprakashInfratechLimited.Theappellantbeingaco-promisorisjointlyandseverallyliabletorefundthemoneytothehomebuyerunderSection43oftheContractAct,1872.InPioneerUrbanLandandInfrastructureLtd.andOrs.Vs.UnionofIndia,(2019)8SCC416,heldthatRERAandIBCareparallelremedy.

18. SupremeCourtinBankofIndiaVs.KetanParekh,(2008)8SCC148andS.VanithaVs.DeputyCommissioner,Bengaluru,2020SCCOnLineSC1023,heldthatthecasesmightarise,

whereboththeenactmentshavethenon-obstanteclause,theninthatcase,properperspectivewouldbethatonehastoseethesubjectandthedominantpurposeforwhichthespecialenactmentwasmadeandincasethedominantpurposeiscoveredbythatcontingencythennotwithstandingthattheActmighthavecomeatalaterpointoftime,stilltheintensioncanbeascertainbylookingtotheobjectsandreasons.

19. RelyinguponthejudgmentsofthisCommissioninCC/3879-3880/2017DeepakAgrawalandOrs.Vs.ThreeCShelters(decidedon21.01.2020)andCC/1702/2016ShalabhNigamVs.OrrisInfrastructurePvt.Ltd.andOrs.(decidedon06.05.2019),thecounselfortheappellantsubmittedthatthepersonwhohadreceivedthemoneywouldbeliabletorefund.Werespectfullydisagreewithit,inasmuchasithasnottakennoticeofSection43oftheContractAct,1872,whereco-promisorisjointlyandseverallyliable,Section-19ofRealEstate(RegulationandDevelopment)Act,2016,wherethepromoterisindividuallyliableandwellsettledprincipleoflawoftortrelatingtovicariousliability.(SeeCanaraBankVs.CanaraSalesCorporation,(1987)2SCC666andPradeepKumarVs.PostMasterGeneral,(2022)6SCC351.)Assuchthesecasesareperincurium.

20. SurakshaRealtyLimitedinitsPlandated09.07.2021proposedthecompletetheprojectwithin40monthsandthehomebuyerswouldbegivenpossessionoftheirflatswithoutanydelayedcompensation.Duedateofpossessionwas16.05.2016asperallotmentletterdated16.05.2012.SupremeCourtinBangloreDevelopmentAuthorityVs.SyndicateBank,(2007)6SCC442,FortuneInfrastructureVs.TrevorD’Lima,(2018)5SCC442,KolkataWestInternationalCityPvt.Ltd.Vs.DevasisRudra,2019SCCOnLineSC438andPioneerUrbanLand&InfrastructureLtd.Vs.GovindRaghavan,(2019)5SCC725,heldthatahomebuyercannotbemadetowaitforpossessionoftheflatforindefiniteperiod.

21. InviewoflawlaiddownbySupremeCourt,thehomebuyerisentitledtoclaimrefundofhismoneyalongwithinterestincaseofunreasonabledelayinhandingoverpossession.However,StateCommissionhasawardedinterest@18%perannum,whichisonhigherside.CompensationofRs.20000/-formentalagonywasalsonotpayable.SupremeCourtinBangloreDevelopmentAuthorityVs.SyndicateBank,(2007)6SCC442,heldthatinthematterofcontractualobligation,thereisnoscopeforcompensationformentalagonyandharassment.InDLFHomesPanchkulaPvt.Ltd.Vs.D.S.Dhanda,II(2019)CPJ117(SC)heldwheninterestisawardedascompensationinthecasesofrefundofmoney,thenawardingadditionalcompensationwasnotjustified.NowSupremeCourtinthecasesofIreaoGraceRealteck(P)Ltd.Vs.AbhishekKhanna,(2021)3SCC241andCivilappealNo.2324of2021M/s.BarnalaBuildersandPropertyConsultantsVs.Lt.Col.SameerBalodi(decidedon06.06.2021),fixedtheinterest@9%perannuminthecasesofrefund.

ORDER

Inviewoftheaforesaiddiscussions,theappealispartlyallowed.TheorderofStateCommissiondated24.10.2018ismodified.Theappellantisdirectedtorefundentireamountdepositedbythecomplainantwithinterest@9%perannumfromthedateofrespectivedeposittillthedateofactualpayment,withinaperiodoftwomonthsfromthedateofthisjudgment.Respondent-1wouldalsobeentitledforaconsolidatedcostofRs.20000/-.Whilemakingpayment,loanofAxis BankLimitedshallbeadjustedfirst.”

Now it has been held that the opposite parties are liable for the compensation and damages. The opposite parties totally failed to carry out their promise and the complainant cannot be left /for long period. There is clear deficiency of service on the part of the opposite parties and it is a matter of unfair trade practice and unfair contract. What should be the amount of compensation and what should be the rate of interest, will depend on the facts and circumstances of each case as held by on the Supreme Court in the following judgement,

Hon’ble Supreme Court has held in Ghaziabad Development Authority  Vs Balbir Singh (2004) 4 SCC 65-

“The Supreme Court, at the outset, reiterated the position taken in the case of Lucknow Development Authority v. M.K. Gupta, and held that “the Consumer Protection Act has a wide reach and the Commission has jurisdiction even in cases of service rendered by statutory and public authorities”. It further held that the power of the NCDRC extends to awarding compensation to consumers for misfeasance in the public office i.e. an act which is oppressive or capricious or arbitrary or negligent provided loss or injury is suffered by a citizen. Therefore, it upheld the appeals filed before it to the extent that it confirmed the jurisdiction of the NCDRC to award compensation in cases of service rendered by statutory & public authorities (the land development authorities in the present case).

As to the issue of whether the grant of interest at the rate of 18% per annum by the NCDRC in all cases is justifiable, the Supreme Court held in the negative. It stated that “the power to and duty to award compensation does not mean that irrespective of facts of the case compensation can be awarded in all matters at a uniform rate of 18% per annum.” It held it to be unsustainable. The Court further stated that the “Award of compensation must be under different separate heads and must vary from case to case depending on the facts of each case.” The purpose of awarding compensation is to recompense for a loss or injury suffered and such compensation would therefore be proportional to the amount of loss and injury.

While considering the compensation to be awarded to the consumers in cases of deficiency of service by Development Authorities, the Court laid down a range of principles for the determination of the amount of compensation, summarised below:

• To award compensation, the Forum or the Commission must determine that service has been deficient and/or misfeasance in public office which has resulted in loss or injury. While no hard and fast rule can be laid down, the Court gave a few instances where the award of compensation would be justifiable, including where possession is not handed over within the intimated period even though allotment is made and the price is paid. In such cases, the loss could be determined based on loss of rent which could have been earned if possession was given. Compensation could also be the scheme has been canceled without any justifiable cause, after the allotment.

•   Compensation cannot be uniform and to illustrate this, the Court lays down the principle to be followed for the determination of compensation in two cases- – (a) where the delivery of possession is being directed, and (b) where only the monies are directed to be returned or refunded by the Court. In case (a), the compensation for harassment will necessarily have to be less since in a way the aggrieved party is being compensated by an increase in the value of the property he is getting. In case (b) however, the party is suffering a greater loss since he has been deprived of the flat/plot, and his expectation of delivery of possession. He would also be denied the benefit of an increase in the value of land and the compensation thereof. Therefore, the compensation to be awarded in such cases would have to be higher than in case (a).

The Court held that “such compensation has to be worked out after looking into the facts of each case and after determining what is the amount of harassment/loss which has been caused to the consumer.”

• Compensation would include compensation for physical, mental, or even emotional suffering, insult, or injury or loss.”

“The consumer protection laws have a wide reach and the consumers are entitled to receive compensation for deficiency in services rendered by statutory and public authorities. The Consumer Commissions have been vested with the jurisdiction to award the value of goods or services and compensation. On being satisfied that a complainant is entitled to compensation for loss or injury or harassment or mental agony or oppression, it must direct the authority to pay compensation. A wide discretion has been given to determine the quantum of compensation for any loss or damage suffered by a consumer, to redress any injustice. However, it is a well-established principle that the computation of compensation has to be fair, reasonable, and must reconcile with the loss or injury suffered. The Consumer Forum is cast with the duty to take into account all relevant factors for arriving at the compensation to be paid.

This landmark decision has set a precedent on the matter of compensation to be awarded in matters relating to allotment of land by development authorities and has been relied upon in many subsequent cases of the Supreme Court. In the case of H. P. Housing Board v Varinder Kumar Garg] and Haryana Urban Development Authority vs Darsh Kumar, the Supreme Court directed the Commission to follow the principles laid down in the case of Ghaziabad Development Authority vs. Balbir Singh in future cases.”

Hon’ble Supreme Court in the case of Haryana Urban Development ... vs Darsh Kumar, Etc. Etc , Civil Appeal no 5796 of 2002 decided on on 28 July, 2004 has held ;

“This Court has, in the case of Ghaziabad Development Authority vs. Balbir Singh reported in (2004) 5 SCC 65, deprecated this practice. This Court has held that interest at the rate of 18% cannot be granted in all cases irrespective of the facts of the case. This Court has held that the Consumer Forums could grant damages/compensation for mental agony/harassment where it finds misfeasance in public office. This Court has held that such compensation is a recompense for the loss or injury and it necessarily has to be based on a finding of loss or injury and must co-relate with the amount of loss or injury. This Court has held that the Forum or the Commission thus had to determine that there was deficiency in service and/or misfeasance in public office and that it has resulted in loss or injury. This Court has also laid down certain other guidelines which the Forum or the Commission has to follow in future cases.

We are informed that in spite of there being no stay, to payment of interest beyond 12% and in spite of clarification given by this Court's order (reported in (2004) 5 SCC 65), the amounts have still not been paid. We feel that for the lapse Appellants must pay interest at the rate of 15% from 17th March, 2004 till payment. Appellants shall also pay costs fixed at Rs.500/- in each case to the Legal Aid Society of the Supreme Court. The Appellants must recover the amount paid towards costs personally from the officer/s, who were responsible for not paying even after clarification by this Court. We clarify that this Order shall not be taken as a precedent in any other matter as the order has been passed taking special features of the case into account. The Forum/Commission will follow the principles laid down by this Court in the case of Ghaziabad Development Authority vs. Balbir Singh (supra) in future cases. The Appeals are disposed off in above terms. There will be no order as to costs.”

So it is clear that the compensation and rate of interest shall depend on the facts and circumstances of each case and no hard and fast rule can be framed. In this connection some of the judgement of the Supreme Court and Hon’ble NCDRC should be taken into account.

In  the  case  of   PRIYANKA MITTAL & ANR. V. PARSVNATH DEVELOPERS LTD. & ANR. (NCDRC).These appeals arise out of single order of State Commission, hence, decided by common order. These appeals have been filed against the order dated 25.2.2015 in Complaint Nos. 18 of 2013- Nalin Bhargava &Anr. Vs. Parsvnath Developers Ltd. &Anr.; 34 of 2013- Jasleen Viswanathan &Anr. Vs. Parsvnath Developers Ltd. &Anr.; 58 of 2011- Janmejai Mani Tiwari Vs. Parsvnath Developers Ltd. &Anr.; 68 of 2013- Indu Singh Vs. Parsvnath Developers Ltd. &Anr.; 69 of 2013- Poonam Sagar Vs. Parsvnath Developers Ltd. &Anr.; 86 of 2010- Priyanka Mittal &Anr. Vs. Parsvnath Developers Ltd. &Anr.; 101 of 2011- Mohd. Aslam Khan &Anr. Vs. Parsvnath Developers Ltd. &Anr.; 130 of 2012- Dr. Sunil Kr. Singh &Anr. Vs. Parsvnath Developers Ltd. &Anr.; 49 of 2012- Neera Mittal &Anr. Vs. Parsvnath Developers Ltd. &Anr.; 74 of 2011- Deepak Bhalla Vs. Parsvnath Developers Ltd. &Anr.; 87 of 2010- Syed Gufran Ali Alvi&Anr. Vs. Parsvnath Developers Ltd. &Anr.; 96 of 2011- Uppasana Malik Vs. Parsvnath Developers Ltd. &Anr.; 175 of 20130- Umesh Chandra Dixit &Anr. Vs. Parsvnath Developers Ltd. &Anr.; 97 of 2011- Pravin Kumar Goel &Anr. Vs. Parsvnath Developers Ltd. &Anr. which complaints were partly allowed.

          The  Hon’ble  NCDRC  held that:

“Brief facts of the cases are that opposite parties/respondents are engaged in the activity of housing construction and accordingly they have launched a project named as Parsvnath Planet situated in Gomti Nagar, Lucknow. The project was demonstrated to be very lucrative and made attractive to the vendees, in order to procure/collect money from the needy persons demonstrating themselves to be excellence in the field of construction activity as compared to other builders and assured the buyers/complainants that it has been duly approved by the Lucknow Development Authority and necessary permission has also been obtained from them. The emphasis was made by the opposite parties that the possession of the Unit shall be given within a scheduled period of 36+6=42 months stipulated in agreements executed in between the parties for the project launched in the year 2006. The complainants/appellants attracted by the promise and assurance of the opposite parties, somehow managed and arranged the money from their personal sources as well as on loan at attractive rate of interest and the hard earned money was paid by them to the opposite parties in a hope that the possession of the units shall be provided to them in the year 2009 and they can leave peacefully in their own houses, since the complainants are living in rented houses. 

The complainants visited the construction site of the opposite parties after depositing the entire amount, where it was revealed that the construction activities were on halt and the persons available on the site told the complainants that the apartments are likely to be completed till 2015. Even the partial construction done by the opposite parties was defective and did not match the specifications provided in the agreement. The complainants were shocked on hearing it and observing the site. The complainants immediately contacted the Area Manager, who told the complainants that there is some delay in the construction of the apartment and the apartments shall be ready till June, 2010. The complainants have to repay the amount taken on loan alongwith interest without getting the possession of the allotted units causing irreparable loss and injury to them. The complainants have come to know that the opposite parties have invested the funds earmarked for this project into their other projects in other city due to which they have not been able to complete the project in time. Besides this, it has also come to the light that although the opposite parties had collected huge funds from the buyers but in spite of that the opposite parties have miserably failed to pay the dues of Lucknow Development Authority which forced the Lucknow Development Authority to issue coercive measures against the opposite parties for the recovery of their dues. Alleging deficiency on the part of opposite parties/ respondents, complainants filed separate complaints before State Commission. Aggrieved  by  the  order  of  Hon’ble  State  Commission, these  appeals preferred  before Hon’ble National  Consumer  Disputes  Redressal  Commission.

Hon’ble  NCDRC discussed various  case  laws  and  after  hearing  the  parties held,

“Learned Counsel for appellants submitted that as complainants have been deprived of possession for a long period beyond agreed period, it amounts to restrictive trade practice under  and complainants are entitled to get compensation. Section 2 (nnn) runs as under:- means a trade practice which tends to bring about restrictive trade practice manipulation of price or its conditions of delivery or to affect flow of supplies in the market relating to goods or services in such a manner as to impose on the consumers unjustified costs or restrictions and shall include- Delay beyond the period agreed to by a trader in supply of such goods or in providing the services which has led or is likely to lead to rise in the price; Any trade practice which requires a consumer to buy, hire or avail of any goods, or, as the case may be, services as condition precedent to buying, hiring or availing of other goods or services; Perusal of aforesaid provision reveals that when opposite party delays in delivery of goods which leads to rise in the price of goods meaning thereby, more price is charged from complainant, it amounts to restrictive trade practice. In the case in hand, opposite party on account of delayed delivery of possession is not charging higher rate than the agreed rate for delivery of possession of flat, so, it does not fall within the purview of restrictive trade practice under   ”

“Admittedly, agreements were executed in 2006 and as per agreements, possession of flats was to be delivered within 42 months, meaning thereby, possession was to be given in the year 2009-2010 and possession has not been handed over so far though year 2016 has started. No doubt, complainants are entitled to get penalty amount for delayed delivery of possession as per clause 10 ( c) of the agreement but opposite party cannot be permitted to avail benefit of aforesaid clause for indefinite period. This penalty clause should be allowed for the benefit of parties for a limited period and in the cases in hand, I deem it appropriate to extend applicability of aforesaid clause for a period of one year beyond 42 months and after that, complainants are certainly entitled to compensation. Opposite party cannot be allowed to avail huge funds of complainants by paying merely Rs. 5/- per sq. ft. for example, complainants who have purchased flat measuring 164.901 sq. mtr., they have made payment of about Rs. 31.00 to 32 lakhs and in the garb of clause 10 (c), opposite party is paying penalty @ approximately Rs. 9,000/- per month against enjoying funds more than Rs. 30.00 lakhs. As complainants have been deprived to shift to their flats for a long period which would not only have given them satisfaction of living in their own house but also have raised their social status and opposite party has enjoyed funds of complainants for a long period, I deem it appropriate to allow compensation @ Rs. 15,000/- p.m. to the complainants who have applied for flats upto 175 sq. mtr and Rs. 20,000/- per month to complainants who have applied for flats above 175 sq. after 54 months of execution of agreement till delivery of possession. ”

Against this judgment, parties went to Hon’ble  Supreme  Court. The judgment of Hon’ble  Supreme  Court is:- 

In  Nalin Bhargava  vs.  Parsvnath Developers Ltd. CA 6662/2018 @ SLP(C) 7596/2016 etc and other related civil appeals on 13 July, 2018, Hon’ble Supreme Court held:-

          “Leave granted in all the special leave petitions.CA 6662/2018 @ SLP(C) 7596/2016 etc.          

It is submitted by Mr. M.L. Lahoty, learned counsel appearing for the appellants in all the appeals that the possession has been handed over and the deficiencies have been removed and, therefore, he has no grievance. However, Mr. Lahoty would insist that there should be imposition  of  costs as compensation.

Mr. Sachin Datta, learned senior counsel appearing for the developer has raised   objections    with regard to imposition of costs.

Having heard learned counsel for the parties, we are of the considered opinion that the cause of justice would be best subserved if each of the appellants in the present appeals are given Rs.1,50,000/- (Rupees one lakh fifty thousand only) per flat, towards costs. When we say “cost”, we mean costs alone and nothing else.”

These builders are just earning money from the consumers to whom they issued allotment letters and got a huge amount. They keep this amount for a long time and earn interest on it. Property dealing is that part of business where they never pay a penny to the consumers on their amounts deposited for a long-term or if they pay, they pay a meagre interest of about 5% or so but they charge 18 to 24% or more if the consumers default in depositing any instalment. It reminds us the story of “The Merchant of Venice” The Merchant of Venice is the story of a Jewish money lender Shylock who demands that an antisemitic Christian offer “a pound of flesh” as collateral against a loan. These acts of builders also remind us the age of  Sahukari during ancient India and also during British Raj. Whether these builders have power to frame their own law? They put their terms and conditions in such a way that the sufferer will always be the consumer. The Consumer Protection Act 1986 has been enacted for the benefits of consumers,  so the courts dealing with Consumer Protection Act 1986 should come forward for their rescue. The courts are not governed by the builders but they are governed by the law, Custom and Usages. Now in the background of all the facts and also the facts of the present case, we will also discuss something more.

After taking account the main objects of the Consumer Protection Act, the facts and circumstances of the present case ,we will decide the amount of compensation and damages for the complainant. The opposite parties have objected that this flat has been taken by the complainant for the commercial use. The opposite parties have stated that the complainant did not ask for the possession of the flat but he prayed for the refund of his amount which shows that the flat was booked for commercial purposes and not for personal living . If a person who trusted the opposite parties and applied for a unit in the year 2012 and he did not get the flat or he was not given any flat by the opposite parties even after 10 years of the booking of the flat ,in such circumstances he may think better option to get refund otherwise that may also be not refunded to him. The allottees know that the builders have higher links that’s why they are going and collecting huge amount of money from the innocent allottees. If the complainant has asked for refund of his money, this will not show that he does not want the flat. Maybe he has purchased a flat somewhere else and therefore he is requesting for the refund of his money. If the opposite parties think so, we are inclined to see clause 6 of the relief which is “any other order which this Hon’ble commission may deem fit and proper in the circumstances of the case may also be passed”. So taking into consideration this relief clause now we are of the opinion that there should be an order for the delivery of possession of the flat with completion and occupancy certificate and also an order to execute the registry of the flat with completion certificate, occupancy certificate and NOCs of fire department, civil aviation department, pollution control Department etc and it should be done within eight weeks from the date of judgement of this complaint case otherwise after eight weeks the opposite parties shall jointly and severally liable to pay damages at a rate of ₹ 2 lakhs per month till the actual delivery of possession and execution of sale deed with all the relevant documents as mentioned above.  Seeking refund of money deposited does not prove that this flat has been applied for commercial use or for reselling.

Now we take the facts and circumstances of the present case. In this case the complainant paid ₹ 35,14,033/– against the total price of ₹ 51,07,355/, so about 70% of the basic cost has already been paid by the complainant and he did not get the possession of the flat as promised by the opposite party within the time limit framed by the opposite parties which was 42 months. After considering all the above-mentioned judgements of the Hon’ble Supreme Court and Hon’ble NCDRC we are of the opinion that the complainant is entitled for the following reliefs:-

The complainant is entitled to get possession of the flat as allotted provisionally bearing unit reference number GDI 0240104 situated in“Garden Isles” at Jaypee Greens Noida within eight weeks from the date of judgement of this complaint case on depositing the rest amount of ₹ 51,07,355 / without any interest and if the possession was not delivered to him with completion and occupancy certificate and NOC’s of fire department, civil aviation department, pollution control Department etc , complainant will be entitled to get ₹ 2 lakhsper month after eight weeks from the date of judgement of this complaint case..

                                   In Alternative

The complainant is entitled to get the present market value of the flat that exist today as per valuer report with interest at a rate of 9% on this amount from 15.10.2015 till the date of actual payment.

The complainant is entitled to get ₹ 15,000 per month starting from 15.10.2015 till the date of actual payment with interest at a rate of 10% per annum and it should be paid within eight weeks from the date of judgement of this complaint case and if not paid within eight weeks from the date of judgement of this complaint case, the complainant will be entitled for interest at a rate of 15% from 15.10.2015 till the date of actual payment.

The complainant is entitled to damages of ₹ 1.5 lakhs as per judgement of the Hon’ble Supreme Court.

For relief number three we are of the opinion that the complainant is entitled to get ₹ 40 lakhs from the opposite parties within eight weeks from the date of judgement of this complaint case towards the mental torture, agony, harassment and depression and this amount if not paid within eight weeks from the date of judgement, the complainant will be entitled to receive interest at a rate of 10% on this amount after eight weeks from the date of judgement of the complaint case.

The complainant is entitled to get ₹ 1 lakh towards cost of the case and it shall be paid within eight weeks from the date of judgement, the complainant will be entitled to receive interest at a rate of 10% on this amount after eight weeks from the date of judgement of the complaint case till the actual payment.

Therefore the complaint case is allowed accordingly and the following order is being passed .

ORDER

1. The opposite parties are directed jointly and severally to hand over the possession of the flat as allotted provisionally bearing unit reference number GDI 0240104 situated in “Garden Isles” at Jaypee Greens Noida within eight weeks from the date of judgement of this complaint case on depositing the rest amount of ₹ 51,07,355 / without any interest and if the possession was not delivered to him within eight weeks along with completion and occupancy certificate and NOC’s of fire department, civil aviation department, pollution control Department etc  , complainant will be entitled to get ₹ 2 lakhs per month after eight weeks from the date of judgement of this complaint case.

                                                In Alternative

The opposite parties are jointly and severally to pay the amount of the flat at market rate as exist today on the basis of a valuer report within eight weeks from the date of judgement of this complaint case with interest at a rate of 9% on this amount from 15.10.2015 till actual payment.

2. The opposite parties jointly and severally are directed to pay ₹ 15,000 per month starting from  15.10.2015 till the date of actual payment with interest at a rate of 10% per annum and it should be paid within eight weeks from the date of judgement of this complaint case and if not paid within eight weeks from the date of judgement of this complaint case, the opposite parties shall pay interest at a rate of 15% from 15.10.2015 till the date of actual payment.

3. The opposite parties , jointly and severally , are directed to pay ₹ 1.5 lakhs as damages to the complainant which shall be paid within eight weeks from the date of judgement of this complaint case, and if not paid within eight weeks from the date of judgement of this complaint case, the opposite parties shall pay interest at a rate of 10% after eight weeks from the date of judgement of this complaint case till actual payment.

4. The opposite parties , jointly and severally, are directed to pay ₹ 40 lakhs to the complainant towards mental agony, torture, harassment and depression which shall be paid within eight weeks from the date of judgement of this complaint case, and if not paid within eight weeks from the date of judgement of this complaint case, the opposite parties shall pay interest at a rate of 10% after eight weeks from the date of judgement of this complaint case till actual payment.

5. The opposite parties , jointly and severally, are directed to pay ₹ 1 lakh to the complainant towards cost of the case which shall be paid within eight weeks from the date of judgement of this complaint case, and if not paid within eight weeks from the date of judgement of this complaint case, the opposite parties shall pay interest at a rate of 10% after eight weeks from the date of judgement of this complaint case till actual payment.

All the decretal amount shall be paid within eight weeks from the date of judgment of this complaint case, otherwise the opposite parties shall pay interest at the rate as mentioned in each direction of the judgement.  If it is not paid within eight weeks from the date of judgment of this Complaint Case, the complainant shall be entitled to present Execution Proceedings before this court at the cost of the opposite parties.

The stenographer is requested to upload this order on the Website of this Commission today itself.

Certified copy of this judgment be provided to the parties as per rules.     

          (Vikas Saxena)                                (Rajendra Singh)

              Member                                     Presiding Member

Judgment dated/typed signed by us and pronounced in the open court.

Consign to the Record Room.

       (Vikas  Saxena)                                    (Rajendra Singh)

              Member                                        Presiding Member

Dated  October 07 , 2022

JafRi, PA II

C-2