The instant complaint under Section 17 of the Consumer Protection Act, 1986 (for brevity, ‘the Act’) is at the instance of a couple/intending purchasers against the developer/builder i.e. Kolkata West International City Pvt. Ltd. (in short, ‘KWIC’) on the allegation of deficiency in services on the part of them in a consumer dispute of housing construction.

          Succinctly put, Complainants’ case in brief is that on 08.05.2010 they booked one self-contained flat measuring about 982 sq. ft. being Apartment No.03 on the 4^th floor of Tower No.01 along with one open car parking space in the project of KWIC 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.20,05,530/- including cost of car parking space and other miscellaneous expenses.  At the time of booking, the complainants paid an amount of Rs.1,00,000/- by cheque and subsequently, they have paid Rs.9,40,960/- as part consideration amount including the booking amount towards the said total consideration amount.  The complainants submit that since the OP could not proceed with the construction of Tower No.1 requested vide Letter dated 16.03.2012 to cancel the agreement dated 28.03.2010 and to enter into a fresh agreement to purchase a flat measuring about 1388 sq. ft. in Tower No.2, Apartment No.1 on the 1^st floor at a total consideration of Rs.30,47,820/- and in this regard a new agreement was executed on 22.08.2012.  As per terms of the agreement, the OP was under obligation to complete the construction and to handover the subject flat and car parking space within 31.12.2014.  The complainants have alleged that on several occasions, they requested the OP to complete the construction and to handover the physical possession of the flat as per Agreement but it turned a deaf ear.  Hence, the complaint with prayer for several reliefs, viz. - (a) to direct the OP to handover the flat and car parking space else refund of money of Rs.9,40,960/- along with interest @ 18% p.a.; (b) to award compensation of Rs.10,00,000/- for mental agony and harassment etc.

          The Opposite Party by filing a written version has admitted the factum of payment by the complainants to purchase the flat along with the covered car parking space in ‘Lavanya-Tower 2’ at the Kolkata West International City (KWIC) Township and payment of Rs.9,40,960/-.  The OP has 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 OP has 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.   At the time of final hearing, on behalf of OP, BNA has been filed.  The parties have also relied upon some documents including the allotment letter and the standard terms and conditions dated 22.08.2012.

          The overwhelming evidence on record makes it abundantly clear that on 08.05.2010 the complainants submitted an application to OP/developer for allotment of a flat measuring about 982 sq. ft. super built up area being No.03 on the 4^th floor of Tower 1 along with one open car parking space in the project of OP at the KWIC Township under construction linked payment plan at a total consideration of Rs.20,05,530/- including the cost of open car parking space and miscellaneous costs.  It is not in dispute that at the time of application, complainants had deposited Rs.1,00,000/- by cheque.  On 10.05.2010 the OP issued a provisional allotment letter in favour of the complainants and allotted the said apartment.  It also remains undisputed that the complainants have paid a total sum of Rs.9,40,960/- 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 the OP could not proceed with the construction of Tower No.1 and as such proposed to the complainants to purchase of a flat measuring about 1388 sq. ft. being Apartment No.2 in Tower No.2 at a consideration of Rs.30,47,820/- and that effect an agreement was executed on 22.08.2012.  Evidently, no progress in the construction has been made.  In other words, the OP has failed to obtain the necessary permission or sanctions in starting the construction of the relevant tower.  As per terms of the Agreement, the OP/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”.

            Mr. Alok Mukhopadhyay, Ld. Advocate appearing for the complainants 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 OP has submitted that in accordance with the said clause, the OP is under obligation to pay to the complainants 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 complainants.  On the contrary, Ld. Advocate for the complainants has contended that in respect of a similar case the Hon’ble Supreme Court has affirmed the order passed by this Commission in refunding the amount with an interest @ 9% p.a.   Placing the said decision reported in II (2019) CPJ 29 [Kolkata West International City Pvt. Ltd. – Vs. – Devasis Rudra]  Ld. Advocate for the complainants submit that the complainants are entitled to the same relief.

          The facts and circumstances of the case indicate that the OP has committed an unfair trade practice by accepting the consideration amount from the complainants 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.

          Therefore, relying upon the authority as referred above, it can safely be said that the complainants are entitled to compensation in the form of interest @ 9% p.a. over the amount of Rs.9,40,960/- already paid on diverse dates from the date of each payments till its realisation.

          On evaluation of materials on record, it transpires that the complainants being ‘consumer’ as defined in Section 2(1)(d) of the Act hired the services of OP on consideration  and OP has failed to fulfil their part of obligations as per Agreement and thereby deficient in rendering services towards the complainants within the meaning of Section 2(1)(g) read with Section 2(1)(o) of the Act.  Therefore, the complainants are entitled to some reliefs.  In my view, a direction upon the OP to refund the amount of Rs.9,40,960/- 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 complainants have to approach this Commission and therefore, complainants are 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 is directed to refund Rs.9,40,960/- in favour of complainants within 60 days from date;
2. The Opposite Party 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 is directed to pay Rs.10,000/- as cost of litigation to the complainants.