1. The abovesaid complaints have been filed by Pashmina Waterfront Buyers' Association, a society registered under the Kamataka Societies Registration Act, 1960, under section 21(i)(a) of the Consumer Protection Act, 1986 against the opposite party - Liliy Realty Pvt. Ltd alleging deficiency in service on the part of the opposite party.

2. Since the facts and question of law involved in these complaints are similar except minor variations in the dates and the unit numbers, these complaints are being disposed of by this common order. However, for the sake of convenience, consumer complaint No. 61 of 2018 is treated as the lead case and the facts enumerated hereinafter are taken from the above mentioned consumer complaint.

3. The brief facts of the case are that the association – complainant has filed the instant complaint on behalf of 28 home buyers, who have booked apartments in the "Pashmina Waterfront" project, located at Bhattarahalli Village, Bidarahalli Hobli, Bangalore East Taluk (hereinafter referred to as "the project") announced by the opposite party. It is alleged that the opposite party collected the booking amounts from the prospective buyers on the basis of promises outlined in the sales brochure and the representations made in the advertisments. At the time of booking, the opposite party assured that the possession of the apartments complete in all repsects would be delivered on or before December 31, 2014, with a grace period of 6 months. However, despite the passage of nearly three years beyond the promised date, the project remained incomplete, and the possession of the apartments was not delivered. The agreement stipulated that timely payment by the buyers is crucial, but similar emphasis was not placed on the opposite party's obligation to deliver the possession on time. It is alleged that according to the construction agreement, while a delay in payment by the allottee could result in cancellation of the allotment and forfeiture of 10% of the consideration as liquidated damages or overdue interest at 18% per annum, but a delay in delivery by the opposite party only incurs a nominal compensation of Rs. 10/- per square foot of saleable area per month, as per clauses 5.2, 5.7, and 6.3 of the construction agreement.

4. Aggrieved by the opposite party's misconduct, deficiencies in service, and unfair trade practices, the association, on behalf of 28 consumers, filed the instant complaint with the following prayer:

“i) Direction to the Respondent to handover possession of Apartments, to respective consumers, complete in all respects and in confomiity with the Construction Agreement and for the consideration mentioned therein (without any excess demand), with all promised facilities and amenities (including essential utilities such as electricity, water and power back up) and as per quality standards promised, and execute all the necessary and required documents (post receipt of appropriate occupancy certificate and other permissions/approvals from relevant authorities) in respect of the apartments in favour of the respective consumers, on or before 31st December, 2018 or within such timeline as fixed by this Hon'ble Commission;

ii) Direction to the Respondent to pay compensation in the form of simple interest on the entire self-financed amount paid by the concerned consumers @ 12% per annum from the respective promised date of possession till the date of actual physical possession as per clause (i) above is handed over by the Respondent, provided such physical possession is handed over on or before 31st December, 2018; or in the alternative; 

iii) Direction to the Respondent to pay compensation in the form of simple interest on the entire self-financed amount paid by the concerned consumers @ 18% per annum from 31st December, 2018 till the date of actual physical possession as per clause (i) above is handed over by the Respondent, in event that the Respondent fails to deliver possession of the respective apartments as per clause (i) above on or before 31st December, 2018; 

iv) Direction to the Respondent Company to reimburse the deficit in the interest paid by the concerned consumers to the bank, along with compensation in the form of simple interest @ 18% per annum from the date of default till the date of reimbursement; 

v) Direction to the Respondent Company to pay Rs. 3,00,000/- (Rupees Three Lakh) each, as compensation for disruption to living arrangements, mental torture, agony and harassment caused to the concerned consumers on account of the deficient and unfair practices of the Respondent; 

vi) Direction to the Respondent to pay a sum of Rs. 50,000/- (Rupees Fifty Thousand only) to each concerned consumer represented herein, towards litigation costs.”

5. The opposite party resisted the complaint through filing statement of objections stating that most of the complainants are induling in commercial activity as they invested in the project in order to gain substantial return of investment either by way of resale of the property or for profit or rent on completion of the project. Hence, they are not ‘consumers’ as defined under the Consumer Protection Act, 1986. It is further stated that many complainants delayed the payment towards the project to the opposite party during the construction of the Project. It is further stated that even as on date some of the members have pending dues that is required to be paid to the opposite party under the executed agreements which payments are required to complete the overall structures and fits outs of the Project. It is further stated that since the complainants have themselves agreed to take the possession of their individual apartments on or before 31 December 2018 indicating waiver of any delay by voluntarily granting extension of time to complete the project and the necessary fit outs, the question of the opposite party to pay 12% interest per annum from the promised date of possession till the date of actual possession does not arise. Even otherwise, the said relief is specifically denied as payable by the opposite party. It is further stated that the alternative prayer made in the complaint for directing the opposite party to pay compensation in the form of simple interest on the entire self-financed amount has become infructuous as the said relief is contingent in nature and the cause of action has not yet occurred for the said relief to be granted. It is further submitted that the buyers are not entitled to compensation, interest or damages except as otherwise agreed under clause 6.3 of the Consturction Agreement, which stipulates that if the opposite party fails to complete the construction of the apartment within the specified period together with grace period of 06 months, then for such delay, the opposite party would be liable to pay Rs. 10/- per square feet of sale area per month of delay till the date of delivery, provided that the purchaser has remitted and paid all the balance sale consideration as per agreement. It is further stated that the opposite party has intentionally not delayed the construction of the project and has completed the construction of the 5 Towers and presently the painting and fit outs are being carried in the said Apartments and the Project. It is further stated that the completion of the construction of the Towers and the fit outs being carried out, proves that the opposite party has made best efforts to complete the project and hand over the same to the complainant in terms of the agreements executed. It is further stated that five towers have been constructed and is ready for handing over the possession to the complainants on or before 31st December, 2018. It is further stated that the opposite party is not deficient in service and the complaint is liable to be dismissed. 

6. The complainant has filed rejoinder to the statement of objections. Evidence by way of affidavit and supporting documents have been filed by both the parties.

7. Learned counsel for the complainant has argued that overall delay in construction of the project and non-affirmative time schedule for completion and possession resulted in grave irreparable financial and personal loss to the home buyers. He further argued that a meeting was held between the management of the opposite party and group of 104 buyers of the project on 19.12.2015 wherein the opposite party claimed that the project shall be completed including all facilities and amenities by 30.06.2017 but the opposite party had not only failed to deliver the possession of the apartment within the promised time period but has also failed to offer possession of the apartment complete in all respect seven after an inordinate delay of more than 3 years from the promised date of possession. He further argued that common facilities and amenities as promised in the brochure and the agreement have not been completed and provided. The complainants have not just booked the apartment but have booked the apartment along with the facilities and amenities promised in the brochure and the agreement and any possession offered without such amenities and facilities frustrates the purpose of booking the apartments in the project. It is further argued that once there is an agreement for a specific area of the apartment, the opposite party is duty bound and responsible to give the apartment with the agreed area. Even the opposite party failed to intimate the buyers of such reduction in the apartment. In support of his contentions, he placed reliance on the following decisions:

1. Wg. Cdr. Arifur Rahman Khan & Ors. Vs. DLF Southern Homes Pvt. Ltd., Civil Appeal No.6239 of 2019, decided on 24th August 2020

2. Pawan K. Aggrawal Vs. Sepset Properies Pvt. Ltd., CC 1640 of 2017, decided on 17th November 2021

3. Vishal Malik & Anr. Vs. Pioneer Urban Land and Infrasructure Ltd., Consumer Case No. 1238 of 2017, decided on 29th March 2019

4. M/s Supertech Ltd. Vs. Rajini Goyal, Civil Appeal Nos. 664950 of 2018 decided on 23rd October 2018

5. Debashis Sinha vs M/S R.N.R Enterprise Rep. by its Proprietor/Chairman, Kolkata & Ors., Civil Appeal No. 3343 of 2020, decided on 09. 02.2023

6. Vikas Mittal Vs. DLF Universal Ltd. &Anr., CC No. 424 of 2020 dcided on 12.01.2022.

7. Santhosh Narasimha Murthy & Ors v. M/s Mantri Castles Private Limited & Anr, in Civil Appeal No. 8418 of 2022 decided on 25.07.2023.

8. The counsel for the opposite party reiterated the facts and argued that project was delayed due to reasons beyond the control of opposite party. It is submitted that clause 6.1 of the Construction Agreement prescribes the tenure for completion of construction and clause 6.2 of the same stipulates certain events, on happening of which, the opposite party cannot be held responsible for the delay caused, including force majeure events such as:

a. delay is attributable to statutory bodies sanctioning licenses and modification of plans

b. late payments received from the prospective purchasers

c. delay due to other force majeure events such as shortage of raw materials, heavy rain, strikes, political outfits etc.

9. Further, it was argued that the opposite party has fulfilled its obligation to pay interest to the bank till the occupation certificate is obtained. All 28 complainants have purchased under the “Live Lite” scheme. The opposite party has duly paid the interest to the bank as per the scheme agreed between the parties through the Supplemental Deed to Agreement to Sell. It is pertinent as per clause 8 of the Supplemental Deed to Agreement to Sell and Supplemental Deed to Construction Agreeement, the complainants are not entiltled to delay compensation as the same was an essential condition of the scheme, as opposite party herein has paid interest to the bank on behalf of those complainants.

10. Further,  it was argued that the complainants were given a free hand to negotiate the Construction Agreement and Agreement to Sell clauses and only thereafter the same was finalized and the complainants entered into the said agreement with the opposite party. It is pertinent to note that despite existence of force majeure events as elaborated above, in the interest of the customers, the opposite party has not avoided to pay the interest to the complainants’ bankers.

11. Further, it was argued that the complainants have invested in the Project on a commercial basis and thus the complainants are not a ‘consumer’ as defined under Section 2 (d) of the Act as for the last five years they have not taken possession of their respective units. 

12. It is stated that during the pendency of the complaint, 14 of the complainants withdrew their complaint and out of remaining 14 complainants, 09 have already taken possession and 05 are still to take possession. 

13. We have considered the rival contentions and perused materials available on record. The question which falls for our consideration is whether there is deficiency in service on the part of the opposite party. 

14. One of the objections by the the opposite party was that the complainant is not a ‘consumer’ but merely an investor who has purchased the said unit for the purpose of rental benefits and price appreciation. In this regard, it would be appropriate to draw attention to this Commission’s order in the case of Sanjay Rastogi Vs. BPTP Ltd. Anr., Consumer Complaint No. 3580 OF 2017, decided on 18.06.2020,  which was subsequently upheld by the supreme Court in the case of BPTP Ltd. Vs. Sanjay Rastogi decided on 12.04.2021. The relevant extract of the judgment are reproduced herein: 

“One, the Complainant has clarified in the very first para of his plaint that he is not buying the unit for any commercial purpose. It is for the OP to prove otherwise. Two, commercial purpose requires that the Complainant be shown to be in the business of buying and selling flats. No attempt has been made to prove this.” 

15. This Commission has taken similar view in the case of Sai Everest Developers vs. Harbans Singh Kohli, 2015 SCC Online NCDRC 1895 decided on 21.07.2015, in which it was held that “the Opposite Party should establish by way of documentary evidence that the Complainants were dealing in real estate or in the purchase and sale of the subject property for the purpose of making profits.”

16. In the present complaint, the opposite party failed to produce any documentary evidence that the flats were purchased for investment purpose. Renting out of flats is not investment and for investment purpose it has to be shown that the home buyers are involved in buying and selling the properties for profits. No such evidence has been placed on record in support of this contention, apart from rent agreements. Therefore, the argument of the opposite party holds no merit and the same is rejected.

17. Further, the opposite party has cited force majeure hurdles faced by them and financial constraints as reasons for the delay, which, in our view, lack merit given the continuous delay of around 5 years as the possession was to be given on 30.06.2015 (including grace period of 6 months). The opposite party received the Occupation Certificate on 26.06.2019 after inordinate delay of around 4 years and till date the construction is not complete with promised amenities. This Commission in Reshu Kansal v. Raheja Developers Ltd., 2023 SCC OnLine NCDRC 388 decided on 06.01.2023 made similar observation on the reasons related to force majeure circumstances. The relevant portion of the Order reads as under: 

“8. As far as the contention of the learned Counsel for the Opposite Party Developer that the Project is delayed due to failure on the part of the State Authorities in providing infrastructure facilities like road, water, electricity and sector roads is concerned, we observe that it is the duty and responsibility of the Opposite Party Developer to follow-up with the State Authorities for providing infrastructure facilities like road, water, electricity and sector roads. The Complainant cannot be made victim for the same. Therefore, we see no merit in the contention and the same is rejected.” 

18. The objection that delay was caused due to the delay in getting approvals from the competent authority and due to force majeure circumstances is also devoid of merit. In this regard, attention is drawn to the order of this Commission in Sivarama Sarma Jonnalagadda & Anr Vs. M/s Maruthi Corporation Ltd. & Anr., CC 379 of 2013, decided on 21.09.2021 wherein it was held that :

“the act of the Opposite Party in relying on force majeure clause while retaining the amounts deposited by the Complaiant, is not only an act of deficiency of service but also amounts to unfair tarde practice.”

19. It is also seen that in the inspection report dated 04.11.2023 by Karnataka RERA that permanent BESCOM connection for electricity is not provided, only temporay power supply is available, also, as per sanction plan, two car parking is to be provided to every allottee with stacked parking, but the mechanical stacked parking is not in working condition, club house is not in use, and amphitheatre completed partially. Therefore, after going through the material on record, we are of the view that the opposite party failed to complete the project within the stipulated period and thus, there is delay in handing over the possession to the complainants with all promised facilities and amenities, which constitutes deficiency in service on its part. 

20. Some complainants in the present case are seeking possession of their units, while others are already in possession. Both are seeking compensation for delayed possession. It would be in the interest of justice if the remaining 14 complainants, who are agitating the complaint, get reasonable compensation for delay. For this proposition, we would like to rely on the order of the Hon’ble Supreme Court in Santhosh Narasimha Murthy & Ors v. M/s Mantri Castles Private Limited & Anr., Civil Appeal No. 8418 of 2022, decided on 25.07.2023 wherein the Hon’ble Supreme Court granted  delayed compensation as prescribed in the agreement to all the homebuyers who had already taken possession with a rate of interest 6% on the amount of compensation from the date on which possession was to be given. 

21. In this case, as per clause 6.3 of the construction agreement, the compensation payable by the builder is of Rs.10/- per square foot of salebale area per month of delay. It has been argued by the opposite party that they have admittedly paid the EMIs on behalf of the home buyers till the date of Occupation Certificate. Keeping in view the decision of the Hon’ble Supreme Court in the case of Santosh Narsmha (supra), it would be appropriate to grant compensation in the form of interest at the rate of 6% from the date of promised date of possession as per the agreement till the date of the Occupation certificate.

22. In view of the above, the consumer complaint is allowed in part and it is ordered as under : -

23. Although this complaint has been filed by the association on behalf of 51 home buyers but at the time of hearing the matter i.e. on 15.02.2204, there were 30 home buyers who were agitating the matter. Out of 30 home buyers, 15 home buyers have taken the possession and 15 home buyers have not obtained the possession. 

24. Three members of the association – complainants have filed an applicataion No. 9878 of 2024 stating that they have settled the matter with the opposite party and that they wish to withdraw their names from the complaint.

25. This Commission vide its order dated 11.07.2014 had allowed the said application and the names of three members of the association are deleted from the array of the parties.

26. As regards the other members of the association, who are agitating the matter, Consumer Complaint No. 62 of 2016 is disposed of in terms of the examination and reasons contained hereinabove apropos consumer complaint no. 61 of 2018 (the lead-case) with similar directions mutatis mutandis.