The instant complaint under Section 17 of the Consumer Protection Act, 1986 (for brevity, ‘the Act’) is at the instance of an intending purchaser against the developer/builder i.e. Kolkata West International City Pvt. Ltd. (KWIC) and it executives on the allegation of deficiency in services, primarily on the part of Opposite Party No.1 in a consumer dispute of housing construction.

          Succinctly put, Complainant’s case in brief is that on 04.06.2012 he booked one self-contained flat measuring about 1057 sq. ft. being Apartment No.02 on the 3^rd floor of Tower No.01 along with one open car parking space lying and situated under various R.S. plots within different Mouzas under P.S. Domjur, Dist-Howrah within the local limits of Howrah Municipal Corporation at a total consideration of Rs.30,75,325/-.  On 04.06.2012 at the time of booking, the complainant has paid an amount of Rs.1,00,000/- by cheque and subsequently, he has paid Rs.14,28,862/- as part consideration amount including the booking amount towards the said total consideration amount.   As per terms of the Agreement, the OP was under obligation to complete the construction and to handover the subject flat within 31.12.2014.  The complainant has alleged that on several occasions, he requested the OPs to complete the construction and to handover the physical possession as per Agreement but the OPs have failed to fulfil their part of obligations.  Hence, the complainant has lodged the complaint with prayer for several reliefs, viz. - (a) to direct the OPs to return the advance amount of Rs.14,28,862/- within 15 days from the date of order; (b) to award compensation of Rs.10,00,000/- for mental agony and harassment and (c) litigation cost etc.

          The Opposite Parties by filing a written version has admitted the factum of payment by the complainant to purchase the flat along with the open car parking space in ‘Lavanya-Tower 1’ at the Kolkata West International City (KWIC) Township and payment of Rs.14,28,862/-.  The OPs have stated that they have applied before WB Fire & Emergency Services for provisional no objection on 22.02.2010 and the same was received by them on 03.05.2010.  They have applied before the KMDA for building sanctioned plan on 09.02.2010 and the same was received by OP on 17.08.2010.  Thereafter, they applied for necessary approvals from diverse statutory authorities in respect of the said project which are still awaiting and sanctioning of the same and beyond control of them.  The OPs have stated that as there was no deficiency in services on the part of them, the complaint should be dismissed.

          In support of their respective cases, the parties have tendered evidence on affidavit.  They have also given reply against the questionnaire set forth by their adversaries.   The parties have also filed brief notes of arguments in support of their respective cases.

          The overwhelming evidence on record makes it abundantly clear that on 04.06.2012 the complainant submitted an application to OP/developer for allotment of a flat measuring about 1057 sq. ft. super built up area being Apartment No.02 on the 3^rd floor along with one open car parking space in ‘Lavanya – Tower 1’ at the KWIC Township under construction linked payment plan at a total consideration of Rs.30,75,325/- including the cost of open car parking space and miscellaneous costs.  It is not in dispute that at the time of application, complainant had deposited Rs.1,00,000/- by cheque as booking amount.  On 20.06.2012 the OP No.1 issued a provisional allotment letter in favour of the complainant and allotted the said apartment.  It also remains undisputed that the complainant has paid a total sum of Rs.14,28,862/- as part consideration amount on diverse dates towards the said total consideration amount including the application money of Rs.1,00,000/-.

          The fact remains that on 22.11.2012 the standard terms and conditions-cum-allotment agreement was executed.  Evidently, no progress in the construction has been made.  In other words, the OPs have failed to obtain the necessary permission or sanctions in starting the construction of the relevant tower.  As per terms of the Agreement, the OPs/developer was under obligation to complete the said compartment on or before 31.12.2014 with a grace period for another six months.

          Needless to say, the parties are bound by the agreement. A person who signs a document contain certain contractual terms is normally bound by them even though he is ignorant of their precise legal effect. In a decision reported in AIR 1996 SC 2508( Bharati Knitting Company –vs. – DHL Worldwide Express Courier Division of Airfreight Ltd. )  the Hon’ble Supreme Court has observed thus :

        “It is seen that when a person signs a document which contains certain contractual terms, as rightly pointed out by Mr. R.F.Nariman, Ld. Senior Counsel, that normally parties are bound by such contract; it is for the party to establish exception in a suit. When a party to the contract disputes the binding nature of the signed document, it is for him to prove the terms in the contract or circumstances in which he came to sign the documents need to be established. The question we need to consider is whether the District Forum or the State Commission or the National Commission could go behind the terms of the contract? It is true, as contended by Mr. M.N.Krishanmani, that in an appropriate case, the Tribunal without trenching upon acute disputed question of facts may decide the validity of the terms of the contract based upon the fact situation and may grant remedy. But each case depends upon it own facts. In an appropriate case where there is an acute dispute of facts necessarily the Tribunal has to refer the parties to original Civil Court established under the CPC or appropriate State law to have the claims decided between the parties. But when there is a specific term in the contract, the parties are bound by the terms in the contract”.

                Ms. Sujata Ghosh, Ld. Advocate appearing for the complainant has drawn my attention to Clause 11.3 of the Agreement which provides-

          “11.3   In the event the Sub-Laser does not issue letter of Handing Over in respect of the said Apartment on or before 31^st December, 2014 for reasons otherwise than set out in Clause 4 herein, the Sub-Laser shall pay to the purchaser interest at the prevailing savings bank interest rate of State Bank of India of the amount of the Lease Premium paid by the purchaser from the said date till the date of issue of letter of Handing Over”.

              Mr. P.R. Baksi, Ld. Advocate for the OPs have submitted that in accordance with the said clause, the OPs are under obligation to pay to the complainant and interest at the prevailing savings bank interest rate of State Bank of India i.e. @ 4% p.a. over the amount deposited by the complainant.  On the contrary, Ld. Advocate for the complainant has contended that as OP has failed to issue Letter of Handing Over, the OPs should pay the interest prevalent not exceeding current rate of interest which should not be less than 9% p.a. in any circumstances in view of the decision of the Hon’ble Supreme Court reported in II (2019) CPJ 29 [Kolkata West International City Pvt. Ltd. – Vs. – Devasis Rudra].

          The facts and circumstances of the case indicate that the OPs have committed an unfair trade practice by accepting the consideration amount from the complainant without obtaining sanctions, as required under the law.  Referring to a decision of Hon’ble Supreme Court reported in II (2000) CPJ I [Ghaziabad Development Authority – Vs. – Union of India] the Hon’ble National Commission in a decision reported in III (2007) CPJ 7 [Kamal Sood – Vs. – DLF Universal Ltd.] has observed that it is unfair trade practice on the part of builder to collect money from the prospective buyers without obtaining the required permissions.  It is the duty of the builder to obtain the requisite permissions or sanctions, in the first instance and, thereafter recover the consideration money from the purchaser.  Therefore, the act of the developer not only depicts deficiency in services but also falls under unfair trade practice, as defined under Section 2(1)(r) of the Act.

          In view of the above and more particularly when till date no construction has yet been started, the provisions of Section 3(1) of the Interest Act, 1978 would be applicable in the facts and circumstances of the case.  Section 3(1) of the Interest Act 1978 provides –

       “in any proceedings for the recovery of any debt or damages or in any proceedings in which a claim for interest in respect for any debt or damages already paid is made, the Court may, if it thinks fit, allow interest to the person entitled to the debt or damage or to the person making such claim, as the case may be at a rate not exceeding the current rate of interest, for the whole or part”.    

          In the foregoing Section, ‘current rate of interest’ would mean the highest of the maximum rate at which interest may be paid on different classes of deposits by different classes of scheduled banks in accordance with the directions given or issued by the Reserve Bank of India under the Banking Regulations Act, 1949.

          Therefore, relying upon the provisions of law, it can safely be said that the complainant is entitled to compensation in the form of interest @ 9% p.a. over the amount of Rs.14,28,862/- already paid on diverse dates from the date of each payments till its realisation.

          On evaluation of materials on record, it transpires that the complainant being ‘consumer’ as defined in Section 2(1)(d) of the Act hired the services of OPs on consideration  and OP No.1/developer has failed to fulfil their part of obligations as per Agreement and thereby deficient in rendering services towards the complainant within the meaning of Section 2(1)(g) read with Section 2(1)(o) of the Act.  Therefore, the complainant is entitled to some reliefs.  In my view, a direction upon the OP No.1 to refund the amount of Rs.14,28,862/- and a compensation in the form of simple interest @ 9% p.a. over the said amount from the date of each payment till its realisation will serve the object of justice.  Under compelling circumstances, the complainant has to approach this Commission and therefore, complainant is entitled to litigation cost which I quantify at Rs.10,000/-.

          With the above discussion, the complaint is allowed on contest with the following directions –

1. The Opposite Party No.1 is directed to refund Rs.14,28,862/- in favour of complainant within 60 days from date;
2. The Opposite Party No.1 is directed to pay compensation in the form of simple interest @ 9% p.a. from the date of each payments till its realisation;
3. The Opposite Party No.1 is directed to pay Rs.10,000/- as cost of litigation to the complainant.