KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
VAZHUTHACAUD, THIRUVANANTHAPURAM
C.C. No. 106/2016
JUDGMENT DATED: 25.02.2021
PRESENT :
HON’BLE JUSTICE SRI. K. SURENDRA MOHAN : PRESIDENT
SRI.RANJIT. R : MEMBER
COMPLAINANT:
Romy Chacko, Advocate, 199, Samachar Apartments, Mayur Vihar, Phase-I, Delhi-110 091.
(By Adv. Prabhu Vijayakumar)
Vs.
OPPOSITE PARTIES:
- DLF Southern Towns Pvt. Ltd., (Reg. Office), 1-E, Jhandewalan Extn., Naaz Cinema Complex, New Delhi-110 055, represented by its Managing Director.
- DLF Southern Towns Pvt. Ltd. (Zonal Office), P.D.R Bhavan, Palliyil Lane, Foreshore Road, Kochi-682 016 represented by its Zonal Manager.
- New Town Heights DLF-Kakkanad, Opp: Doordarshan Kendra, Sea Port, Airport Road, Kakkanad P.O, Kochi-682 030 represented by its Project Manager.
(By Advs. M/s Menon & Pai)
JUDGMENT
SRI.RANJIT. R: MEMBER
This complaint is filed seeking direction against the builder to grant delivery of the possession of the flat allotted to the complainant within a period fixed by this Commission, to pay compensation for delay in delivery of possession of the apartment at 18% interest on Rs. 47,08,380/- with effect from 25.06.2013, to refund an amount of 7,32,170/- which was alleged to be illegally collected from the complainant along with 18% interest and costs of the proceedings.
2. The case of the complainant as detailed in the complaint, in brief, is that the complainant who is a native of Kochi is an advocate by profession and is practicing in Delhi. While visiting his parents who were living in Kochi, he used to stay in his elder brother’s house. In order to have an independent house of his own at Kochi, the complainant entered into an agreement with opposite parties for purchase of a three bed room residential flat under the project named as ‘New Town Heights DLF-Kakkanad’. The total sale price of the flat having a super built up area of 1739 sq. ft was fixed at Rs. 47,08,380/- which includes the cost of parking space. The complainant booked the flat attracted by the advertisement published by the opposite parties in 2007 that they proposed to construct a multi-storied luxury apartment with exclusive life style privileges at Kakkanad, Kochi. The proposed project also offered scenic beauty of a mountain valley with gently sloping hills and lush green surroundings. Opposite parties also offered among other things facilities such as self-contained residential estate, signature tower, 3 floors of shopping plaza, club house having an area of 70000 sq. ft., video surveillance, 24 hours power back-up, electricity substation, RO Plant for water treatment, bank ATM, office space, broadband internet etc. Several other facilities were also offered in their brochure. Accordingly attracted by this advertisement made in the brochure the complainant applied for allotment of 3 BHK flat having an area of 1739 sq. ft. He paid an amount of Rs. 5,00,000/- on 14.10.2008. For payment of balance amount the complainant availed a housing loan from HDFC Bank, Ernakulam. The payment plan of the opposite party spread for a period of 2½ years. The terms and conditions provided that in the event the allottee makes default in payment of instalments, he has to pay the defaulted amount with interest at 15% for the first 90 days and thereafter interest at 18% for any delay beyond 90 days. As there was some delay on the part of the allottee/complainant in paying the instalments, the complainant was made to pay 18% compound interest on the amount due on account of delay in payment of instalments due to the opposite parties. The complainant paid a sum of Rs. 12,00,000/- upto 25.06.2010. He paid an amount of Rs. 5,00,000/- at the time of booking and paid Rs. 7,00,000/- between 14.10.2008 and 25.06.2010. It was only on 25.06.2010 that he came to know about the terms and conditions in the agreement. Before the agreement he paid only Rs. 12,00,000/-. As per the agreement total price payable is Rs. 47,08,380/-. Even though clause 1.3 of the agreement provided that the company will grant rebate for early payment of instalments, he was not granted any rebate as provided in the agreement even though he has paid Rs. 12,00,000/- even before the agreement. Instead he was asked to pay compounded interest attributing delay in payment of instalments by counting the period from the date of booking i.e; 14.10.2008. Thus the complainant paid a sum of Rs. 49,18,334/- as against the total cost of Rs. 47,08,380/-. The opposite parties demanded Rs. 3,06,498/- towards delayed interest as on 16.01.2015 and outstanding service tax of July and August 2010 on 16.01.2015. The opposite parties did not complete the construction of the apartment within the stipulated period. After a long delay the opposite party issued a communication dated 24.10.2015 offering delivery of the possession of the flat subject to the payment of an additional amount of Rs. 12,67,929.30 towards cost of increase in area, electricity installation, tax etc. and a further sum of Rs. 1,71,337.28 towards interest due for maintenance security, service tax etc. It is alleged that the above demands made by the opposite parties are illegal, arbitrary and without any justification. According to the complainant the opposite parties have appropriated a sum of Rs. 5,00,000/- towards car parking facility as the car parking is the obligation of the builder. He further contended that the opposite parties demanded Rs. 7,000/- towards club annual subscription, Rs. 30,000/- towards club membership and Rs. 20,000/- towards club security deposit without providing any club facility. The above demand is illegal as the club was not provided by the opposite parties nor any facilities were provided by the opposite parties. The contention of the complainant is that opposite parties have no authority to raise any demand in the name of club as the formation of the club, membership fee and other expenses relating to the same are the prerogative of the residents and not that of the builder. Opposite parties had also claimed Rs. 3,46,060/-towards increase in area and service tax of that area which amounts to Rs. 13,163/-. The complainant’s case is that the amount towards so called increase in area without obtaining the prior consent of the allottee is illegal. He further states that the demand made by the opposite parties for an amount of Rs. 2,00000/- towards permission for electricity, etc. is also impermissible as per clause 1.12 of the agreement. As per the clause the allottee has to pay only Rs. 1,00,000/- towards installation of electricity, water service and other incidental charges. The opposite parties have no authority to charge any service tax as no service tax applies to a building under construction. Even though the complainant requested the opposite parties to provide fresh statement of account after deleting the illegal claims made by them no reply was given by them. The opposite parties failed to deliver the possession of the apartment within 3 years from the date of agreement, instead they offered possession on 27.11.2015 subject to the payment of additional demand as referred above. The complainant states that most of the facilities as stated in the brochure such as electricity substation, RO plant for water treatment, bio gas plant, bank ATM, Wi-Fi, broadband internet, fixed line communication etc. are not made available. They have also failed to construct the signature tower, shopping plaza, club house etc. Hence the complainant requested them to make available the above referred facility before delivering the possession of the apartment. The complainant alleged that the following claims made by the opposite parties are unfair and illegal. The alleged illegal claims made by the opposite parties are Rs. 25,000/- demanded by them for parking space, Rs. 7,000/- for club annual subscription, Rs. 30,000/- for club membership, Rs. 20,000/- for club security deposit, Rs. 46,600.44 demanded towards service tax, Rs. 3,46,060/- demanded for the cost of increase in area, Rs. 13,163/- the service tax due to the increase in area, additional amount of Rs. 1,25,636/- demanded for the alleged increase in area, service tax of Rs. 17,589/- for the flat under construction and an amount of Rs. 1,00,000/- towards obtaining permission for electricity, water supply etc. Complainant filed this complaint praying for direction to the opposite parties to grant delivery of possession of the flat to him, to pass an order directing the opposite parties to pay compensation for delay in delivery of possession of the apartment at 18% interest on Rs. 49,18,334/- with effect from 25.06.2013 till delivery of the apartment and for directing the opposite parties to refund a sum of Rs. 7,32,170/- which they illegally collected towards the charges stated supra.
3. Opposite parties entered appearance on notice and filed a joint version challenging the maintainability of the complaint on two grounds. They contended that since the disputes are arising out of the agreed terms and conditions of the agreement between the parties and as per clause 49 of the agreement which stipulates that any dispute between the parties shall be settled through arbitration, the complaint is not maintainable. They further contended that the complainant is not a consumer as the construction made by the complainant relates to his business activity and therefore it falls under the category of commercial purpose which is outside the purview of the Consumer Protection Act. It is contended that the complainant had booked the flat in Kochi in order to obtain speculative gain from real estate transaction as he is permanently in Delhi and in the above circumstances the complaint is not maintainable. On merits the opposite parties have contended that the contents of the brochure cannot be styled as offer. The contents of the brochure are tentative information about the project and the complainant cannot claim it as a matter of right. Complainant has to go by the Apartment Buyer’s Agreement. The complainant cannot make any claim against them which is not in their agreement. The super area of the apartment as stated in the agreement is tentative and the final super area of the apartment shall be confirmed only after construction of the said apartment is completed and the completion certificate is granted by the Govt. authority and the total price payable for the apartment shall be recalculated upon confirmation by the opposite party for any increase or decrease in the super area. If there is increase in super area the allottee had agreed under the agreement to pay for the increase in super area. The complainant was a gross defaulter in payment of instalments as per the payment schedule and hence the opposite parties are empowered to charge interest for the delayed payment and defaulted payments which is as per the terms of the agreement. The allegation of the complainant that the complainant was not aware of the terms and conditions of the agreement is baseless as the complainant had signed the application for allotment by sale on 29.09.2008 which contains similar terms and conditions as stipulated in the Apartment Buyer’s Agreement. Thus the complainant was well aware of the terms and conditions contained in the application for allotment by sale. As per the construction linked payment plan agreed by the complainant, the complainant had to pay a total amount of Rs. 20,00,000/- as on 02.05.2010. Admittedly the complainant had paid only Rs. 12,00,000/- before 25.06.2010. Thus it is clear that the complainant had failed to make payment of instalments under the payment plan. Hence he is not eligible for rebate as provided under the agreement. The complainant was given Rs. 1,88,200/- as referral rebate and that amount was adjusted towards the amount payable by him. It is clearly stated in the statement of account issued by the opposite party dated 24.10.2015 and the final statement issued on 25.10.2005 as per the terms of the agreement. The final statement of account is valid and binding on the complainant. After completion of the apartment the super area of the apartment was found to be increased and accordingly demands were made by the opposite parties as per the agreement. As per the requisition of the complainant two car parking spaces are allotted to him by the opposite party. The total price includes the price of car parking space. Since the complainant had agreed to the terms of the Apartment Buyer’s Agreement he cannot evade from the liability of payment under the Apartment Buyer’s Agreement. The final statement of account shows the payment and dues under different heads in terms of the agreement only. As per the agreement the complainant had agreed to make payment of Rs. 7,000/- towards annual club charges, Rs. 30,000/- towards membership fee for the first two years and Rs. 20,000/- towards refundable security deposit. The construction of the club building is completed. The liability to pay the club charges is made mention of in clause 1.14 of the agreement. As per clause 1.9 of the Apartment Buyer’s Agreement opposite party is entitled to raise demand for increase in area. The complainant is liable to make payment of Rs. 2 lakhs towards permission of electricity, water supply installation and connection of utility services as per clause 1.11 of the agreement read with clause 1.12 of the agreement. The provisions of service tax are made applicable to the payments effected on or after 1st July 2010 by the Central Govt. as per Notification No. 29/2010 dated 22.06.2010 issued by the Department of Revenue, Ministry of Finance Govt. of India. The delay in completion of the construction occurred on account of the shortage in availability of labour, shortage of sand, cement and steel in the market. In spite of the earnest efforts of the opposite parties, on account of shortage of sand, cement and steel in the market the stock got exhausted and time was consumed and lost for procuring these materials. However opposite parties have completed the construction and obtained occupation certificate in respect of the apartments and the process of handing over of the blocks is going on. As per clause 10.4 of the Apartment Buyer’s Agreement the complainant is not entitled to compensation as the complainant is a defaulter under the terms of the agreement. Only if the complainant had paid the instalments in time opposite party has to pay compensation and that too @ Rs. 5 per sq. ft of the super area of the said apartment per month and if the period of such delay is beyond six months which is permitted as per the agreement. The complainant was not ready to clear the huge outstanding dues to the opposite parties. Thus the complainant has deliberately breached the terms and conditions under the Apartment Buyer’s Agreement and has failed to perform his part of the contract. The complainant is liable to make the payment as demanded by the opposite parties as per the terms and conditions of the Apartment Buyer’s Agreement. Opposite parties are not liable to pay any amount as claimed by him in the complaint. The complainant had wilfully defaulted the payment of instalments knowing fully well about the consequences in spite of several demand notices and reminders sent by the opposite parties from time to time. The complainant was not ready and willing to pay the instalments as per the payment schedule and he is raising false and untenable grounds which are against the terms of the agreement. Since the complainant is a gross defaulter he is not at all entitled for any compensation as claimed by him. Since the complainant has deliberately violated the terms and conditions of the agreement, he is not entitled to get any relief as sought for in the complaint. Hence they prayed for dismissal of the complaint.
4. On the side of the complainant, the complainant gave oral evidence as PW1. 12 documents were marked on the side of the complainant as Exts. A1 to A12.Marking of Ext. A1 brochure and A9 agreement of sale were objected by the opposite parties as they were photocopies and hence complainant later produced the original and subsequently marked as Ext. A9 & 10. Letter dated 28.07.2007 obtained by the complainant at the time of handing over the possession of the flat was later produced and marked as Ext. A11. The loan account statement issued by HDFC bank to the complainant though stated in the affidavit as Ext. A2 was not marked and these documents were subsequently produced by the complainant and was marked as Ext. A12. The authorized representative of the opposite parties gave oral evidence as DW1 and Exts. B1 to B37 were marked on their side.
5. The complainant had filed an interim application number I.A. 457/2017 praying for an issuance of an interim order directing the opposite party to deliver possession of the flat to the complainant. The complainant agreed to deposit the disputed amount before this Commission subject to final orders. This Commission vide separate order dated 03.04.2017 ordered that on the complainant depositing an amount of Rs. 18,44,000/- before this Commission, the opposite parties shall hand over the possession of the flat which is the subject matter of the agreement dated 25.02.2010 to the complainant. The amount shall remain in deposit subject to final disbursement as per the judgement in C.C. No. 106/2016. The aforementioned amount was deposited by the complainant before this Commission, and the opposite parties handed over the possession of the disputed flat on 28.07.2017.
6. Heard the counsel for the complainant and opposite parties. The following points arise for consideration.
- Whether the complaint is maintainable?
- Whether there is unfair trade practice or deficiency in service on the part of opposite parties?
- Whether the complainant is entitled to get any compensation? If so, what is the quantum?
7. Point (i):- The specific contention of the opposite parties is that the present dispute is arising out of the agreed terms and conditions between the parties. As per clause 29 & 49 of the Apartment Buyer’s Agreement it states that “All or any dispute arising out of or touching upon or in relation to the terms of this agreement including the interpretation and validity of the terms thereof and the respective rights and obligation of the parties shall be settled amicably by mutual discussions failing which the same shall be settled through arbitration” and hence the complaint is not maintainable. However it may be noted that Sec. 3 of the Consumer Protection Act states that the provisions of this Act are in addition to the other remedies available for the consumers. Therefore the arbitration clause made mentioned in the buyer’s agreement does not bar the complainant to approach the Consumer Commission if there is unfair trade practice or deficiency in service on the part of the opposite parties. The specific contention of the complainant is that opposite parties have committed unfair trade practice and deficiency in service. The National Commission in the matter of “Sateesh Kumar Pandey& others Vs. M/s Unitech” decided on 8th June 2015 held that the complaint filed by the consumer before the Consumer Fora will be maintainable despite there being an arbitration clause in the agreement to refer the dispute to the arbitration. The National Commission in this judgment had considered the dictum laid down by the Hon’ble Supreme Court of India in the matter of “National Steel Corporation Vs. Madushoodan Reddy and another reported in 2012 II SC 506” wherein it was held that Sec. 3 of the Consumer Protection Act is an additional remedy available to the consumer and even if there is arbitration clause in the agreement made between the parties he can choose the consumer forum to resolve his grievances. In the light of the above, the contention raised by the learned counsel for the opposite parties is only to be rejected. We do so. The other contention raised by the opposite parties is that the complainant being a resident of Delhi and is practising there he has not specifically stated any purpose for buying property in a far location of Kerala. They contended that the property in question was only booked in order to obtain speculative gains from real estate transaction and hence complainant cannot be considered as a consumer as the same was not applied by him for earning livelihood but merely to obtain profit from real estate transactions. The contention taken by the complainant in this regard is that the flat was purchased for his own use. He is a native of Kochi and the flat is bought for settling down in Kochi. There is no commercial interest or activity whatsoever involved as alleged by the opposite parties. Hence it can be seen that the objective behind buying this flat by the complainant is to live in, though at a later date. Nothing is brought out by the opposite parties to show that the complainant is engaged in the business of purchasing and selling of houses /flats on regular basis just to make profit out of it. The opposite parties failed to prove any commercial activity or interest on the part of the complainant in purchasing the disputed flat. Simply because the complainant is practicing as an advocate in Delhi and that he would shift to Kochi only at a later stage does not convert the purpose of his accommodation acquired by him, to a commercial purpose. Thus the contention of the opposite parties is only to be rejected. We do so. In the light of the above we hold that the complaint is maintainable before this Commission.
8. Points (ii) & (iii):-The first allegation levelled against the opposite parties by the complainant as testified by PW1 is that as per clause 1.3 of the agreement the company should have granted rebate for early payment of instalment by discounting early payment @ 12% per annum. He further pressed that he had paid Rs. 12,00,000/- before the execution of the agreement which was made on 25.06.2010. However he was not granted any rebate as provided in the agreement. Instead he was made to pay compounded interest attributing delay in payment of instalments by counting the period from the date of booking ie; 14.10.2008. Thus he had paid an amount of Rs. 49,18,334/- as against the total cost of Rs. 47,08,380/- which was fixed as per the agreement. The counsel for the opposite party pointed out that the complainant had not paid the instalments as per the payment schedule which was given to him on 14.10.2008, at the time of booking. As per the payment plan the complainant agreed to pay the amounts as stated in the payment plan before the execution of the agreement. Therefore as per the payment plan the complainant should have paid Rs. 20,00,000/- as on 02.05.2010. Admittedly the complainant had paid only Rs. 12,00,000/- on 25.06.2010, on the date of agreement.
9. As per clause 1.3 the company may allow in its sole discretion a rebate for early payment of instalments if paid by the allottee by discounting such early payment @ 12% per annum for the period by which the respective instalment is preponed at any point of time. The rebate can be revised or withdrawn by the company at the sole discretion at any point of time without giving any notice to the allottee. What follows is that the allottees are entitled to get the early payment rebate only if they have paid the instalments as per the payment schedule. Moreover the rebate is discretion of the builder. Admittedly the complainant has not paid as per the payment schedule. As per the payment plan the complainant should have paid Rs. 20,00,000/- before the execution of the agreement which was made on 25.06.2010. The complainant had paid an amount of Rs. 12,00,000/- only. There is clear deviation by the complainant in paying the instalments in time and hence we hold that the complainant is not eligible for the early rebate. The complainant’s further allegation is that the opposite parties failed to deliver possession of the apartment within 3 years from the date of agreement as agreed. As per the agreement the opposite parties had to complete the construction before 25.06.2013. Instead they offered to deliver possession only on 27.11.2015subject to the payment of additional demands of Rs. 12,67,929/- towards increase in super area, electricity installation, service tax and also a further sum of Rs. 1,71,337.28 was demanded by the opposite parties towards maintenance of security, service tax etc. Thus the complainant alleged that clause 10.4 of the agreement is unfair and arbitrary. As per clause 10.4 of the agreement if the opposite party is not in a position to deliver the possession of the apartment within 36 months from the date of execution of the agreement the allottee shall be entitled to compensation @ Rs. 5/- per sq. ft. of the super area of the apartment per month for the period of such delay beyond 36 months. Complainant alleged that the limit of compensation of Rs. 5/- per sq. ft of the super area of the apartment per month as stated in clause 10.4 of the agreement is unfair and arbitrary since the opposite parties charged interest @ 18% for the default in payment of instalments due to the opposite parties beyond 90 days. The opposite parties have thus collected Rs. 49,18,334/- as against 47,08,380/- which was paid by the complainant. The contention of the complainant is that for the delay in delivery of possession the complainant is entitled to get Rs. 23,92,703/- which is calculated @ 18% interest on the sum of Rs. 49,18,334/- the amount already collected by the opposite parties with effect from 25.06.2013.
10. The complainant further alleged that the opposite parties have issued an advertisement in 2007 proposing to construct a multi storied luxury apartment with exclusive life style privilege at Kakkanad. The opposite parties offered among other things facilities such as self-contained residential estate, signature tower, 3 floors of shopping plaza, club house having an area of 70000 sq. ft., video surveillance, 24 hours power back-up, electricity substation, RO Plant for water treatment, bank ATM, office space, broadband internet etc. Several facilities were also offered in their brochure. These facilities were offered in the brochure. However many of these facilities were not given by the opposite parties.
11. The learned counsel for the opposite parties further contended that the contents of the brochure cannot be styled as offer. The contents of the brochure are tentative information about the project. The facilities mentioned in the brochure are only tentative and the complainant cannot claim it as a matter of right. The complainant has to go by the Apartment Buyer’s Agreement. They cannot make any claim against the opposite parties based on brochure. The other contention raised by the learned counsel for the opposite parties is that the final statement of account dated 25.10.2015 issued to the complainant is in terms of the Apartment Buyer’s Agreement. They further stated that the delay was happened due to the shortage of sand, cement and steel in the market and also due to the shortage in availability of labour. The opposite parties alleged that they were not in a position to do the work and to hand over the apartment as stipulated in the agreement due to the above said reasons. Despite their earnest efforts opposite parties’ stock got exhausted and time was consumed and lost for procuring these materials. There is no wilful delay on the part of the opposite parties and the delay occurred only due to the reasons beyond the control of the opposite parties and the same cannot be attributable to the opposite parties.
12. Clause 10.1 of the Apartment Buyer’s Agreement provides that if the handing over of the apartment is delayed due to the reasons that are beyond the control of the opposite parties, then the opposite parties are entitled to extension of time for handing over of the apartment. The opposite parties have completed the construction and obtained occupation certificate in respect of the complainant’s apartment which was situated in B Block. The delivery of possession of the completed apartment was given to the complainant on 28.07.2017.
13. The allotment of buildings by the opposite parties without having proper stock of raw materials such as sand, cement and steel and without having enough labourers especially being an experienced builder, itself amounts to unfair trade practice. The opposite parties miserably failed to prove their contentions that there was shortage of stock and shortage of labourers. Thus the opposite parties failed to establish any force majeure situation for the delay in handing over the possession of the apartment to the complainant. There is unexplained inordinate delay in handing over the possession of the apartment to the complainant. For the delay we hold that complainant is entitled for compensation. Now the question arises as to what is the quantum of compensation which the complainant is entitled for the delay in handing over the possession and not providing the amenities as provided in the brochure.
14. According to the learned counsel for the opposite parties as per clause 10.4 of the agreement, in the event the opposite party is not in a position to deliver the possession of the apartment within 36 months from the date of execution of the agreement, the allottee shall be entitled to compensation @ Rs. 5/- per sq. ft. of the super area of the apartment per month for the period of such delay beyond 36 months. The learned counsel pressed that the complainant is not entitled for any compensation since the complainant is in default of payment of instalments.
15. Perusing the bank statement of the complainant which is marked as Ext. A12 it is noted that the complainant had made regular payment of EMI from the date of agreement. It is admitted that the complainant had booked the flat on 30.09.2008 and he had paid the booking amount of Rs. 5,00,000/- on 14.10.2008 and as per payment plan he had to pay the instalments payment at regular intervals and should have paid a total amount of Rs. 20,00,000/- before the date of agreement. He had paid another sum of Rs. 7,00,000/- before 02.05.2010. Thus admittedly he had paid only Rs. 12,00,000/- before the date of agreement, i.e; on 25.06.2010. But after the agreement he had paid all the instalments in time. For the delay in paying the instalments before the agreement he was forced to pay interest @ 18% for the delayed payment. A perusal of the agreement dated 25.06.2010 reveals much incongruities between the remedies available to both the parties. For eg; clause 10.1 states that “if the handing over of the possession of the apartment is delayed due to force majeure conditions then the allottee agrees that the company shall be entitled to the extension of time in delivery of possession of the said apartment. The company as a result of such contingency also reserves the right to alter or vary the terms and conditions of the agreement or if the circumstances so warrant, the company may also suspend the construction and development for such period as is considered expedient and the allottee shall not have a right to claim compensation of any nature whatsoever including the compensation stipulated under clause 10.4 of the agreement during the period of such suspension”. We have already found that there is no force majeure condition which enables the company to enforce clause 10.1. Clause 10.4 states that “The allottee agrees that if the construction and development of the said complex is abandoned or the company is unable to give possession within 36 months from the date of execution of this agreement or such extended periods as permitted under this agreement the company shall be entitled to terminate this agreement whereupon the company’s liability shall be limited to the refund of the amounts paid by the allottee with the simple interest @ 9% per annum for the period such amounts were lying with the company and the company shall not be liable to pay other compensation whatsoever”.
16. However the Company may at its sole option and discretion decide not to terminate this agreement in which event the company agrees to pay only to the allottee and not to anyone else and only in cases other than those provided in clauses (10.1), (10.2), (10.3) and clause (37) and subject to the allottee not being in default under any term of this agreement, compensation at Rs. 5/- per sq. ft of the super area of the said apartment per month for the period of such delay beyond 36 months or such extended periods as permitted under this agreement. The adjustment of such compensation shall be done only at the time of conveyancing the said apartment to the allottee first named in this agreement and not earlier.
17. Moreover the builder company calculated the time period for construction from the date of agreement only and 36 months starts from the date of agreement, whereas the allottee made the payment from the date of allotment, i.e; 14.10.2008. The complainant was forced to pay interest for the delayed payment occurred before the execution of the agreement @ 18% per month, whereas the builder need to pay only a paltry sum of Rs. 5/- per sq. ft. of the super area per month. From the above it is seen that the agreement dated 25.06.2010 is one sided and unreasonable. The Hon’ble Supreme Court in the matter of “Pioneer Urban Land and Infrastructure Ltd. Vs. Govindan Raghavan and another reported in 2011(2) KHC SN 31 (PAGE 71)” held that incorporating one sided clause in the Apartment Buyers’ Agreement constitutes unfair trade practice. It observed that the allottee is entitled for reasonable compensation. In view of the fact that banks have lowered the interest rate and considering the reason therein in the rate of interest and also that the interest of loan given by the bank varies from 10.5% to 12%, we are of the opinion that interest @ 18% per annum as prayed for by the complainant is on the higher side. We hold that the complainant is entitled for compensation at 12% per annum on the amount which was paid by the complainant. It is further noted that there is delay in delivery of the possession that too without providing the promised amenities and facilities. A brief perusal of the brochure shows that the following amenities have been promised in the brochure. They are self-contained residential estate, signature tower, 3 floors of shopping plaza, club house having an area of 70000 sq. ft., video surveillance, 24 hours power back-up, electricity substation, RO Plant for water treatment, bank ATM, office space, broadband internet etc. Admittedly many of these facilities were not provided by the opposite parties. The contention of the opposite parties that amenities promised in the brochure are only tentative and the complainant cannot claim it as a matter of right cannot be accepted in its totality as facts remain that any assurance given in the brochure is the initial promise made based on which the flat purchaser makes a decision whether to purchase a flat or not. It is noted that some of the facilities as stated in the brochure are made available to the allottees though not mentioned in the agreement. The opposite parties cannot back out from the promise to provide all the facilities in the brochure stating that those facilities are not mentioned in the agreement for sale. The act of the builder in not providing the amenities offered in the brochure amounts to unfair trade practice. Complainant is deprived of those facilities though promised in the brochure. Since all the facilities offered in the brochure are not provided, naturally complainant would have suffered much mental agony and hardship. Therefore the builder is liable to compensate the complainant for the injuries caused to him. Considering all these facts and circumstances the complainant should be paid a compensation calculated at the rate of 12% per annum for Rs. 49,18,334/- from 25.06.2013 till the date of handing over of possession i.e; 28.07.2017.
18. The next question that arises for consideration is as to whether the builder is entitled to charge Rs. 24,000/- more towards car parking facility. As per clause 1.1 the total price of the apartment is Rs. 47,08,318/- and that includes Rs. 5,00,000/- for parking space. Thus the total sale price payable by the complainant including car parking space is only Rs. 47,08,318/-. Admittedly the complainant has paid the amount of Rs. 47,08,318/- and also interest for the delayed payment. The complainant has also deposited an amount of Rs. 18,44,000/- before this Commission as per the direction by this Commission. This amount of Rs. 18,44,000/- includes Rs. 25,000/- which was charged additionally towards parking area. As per the final statement dated 24.10.2015 it was noted that the opposite party has stated that they have only adjusted Rs. 4,75,000/- towards parking area as against Rs. 5 lakhs stated in the agreement. Thus they are claiming Rs. 25,000/- more towards parking area. This demand was illegal as the complainant had already deposited Rs. 47,08,138/- and also interest for the delayed payment. As stated above this amount includes Rs. 5,00,000/- for the parking area. Demanding Rs. 25,000/- more for parking area by the opposite parties is illegal and arbitrary. Complainant is entitled to refund of the amount of Rs. 25,000/- from the opposite parties. Since the complainant has already deposited Rs. 18,44,000/-before this Commission as demanded by the opposite parties, this amount of Rs. 25,000/- is to be refunded to the complainant. The next dispute is with regard to the club annual subscription of Rs. 7,000/- club membership fee of Rs. 30,000/- and club security deposit of Rs. 20,000/-. According to the opposite parties clause 1.14 (vii) of the agreement clearly shows the liability of the complainant to make payment towards club facilities. What is stated in clause 1.4(vii) among other things is that the club usage shall not be limited to only the occupants of the complex but may be open to the external membership also and the company, its nominee or agency appointed for this purpose may make suitable provisions or covenants to this effect in the necessary documents which the allottee undertakes to faithfully comply with, without raising any objection. It is understood that the entire operating cost of the above said club, improvements/upgradations to be carried out over a period of time, direct usage charges for the facilities used and the items consumed by the allottee from time to time, shall in no way constitute any portion of the total price of the said apartment and shall be paid extra and are outside the scope of this agreement. From the above it is clear that the club charges can be levied by the opposite parties only if the allottees have used the facilities and the items are consumed from time to time. Admittedly the complainant has not used the facilities of the club till the handing over of the possession. Thus it is clear that the opposite party builder cannot charge any amount on account of club charges before the complainant has used the facilities. Moreover the club area being common to all the allottees it would be for the association or the apartment owners, to be formed to regulate the use of the club by the allottees. The builder has no authority to deal with the formation of the club, club membership fee, subscription fee, security deposit, as the same is to be dealt with by the association of the apartment owners that is to be formed. In the above circumstance we hold that the complainant is entitled to refund of the club annual subscription charge of Rs. 7,000/-, club membership fee of Rs. 3,0000/-and the club security charge of Rs. 20,000/-. These amounts have already been deposited by the complainant before this Commission. Hence these amounts shall be refunded to the complainant.
19. The other dispute is with regard to the cost of increase in super area and corresponding service tax. According to the opposite parties as per clause 1.9 of the Apartment Buyer’s Agreement they are entitled to raise demand for the increase in area and the complainant is liable to make payment as demanded by them.
20. Clause 1.9 (b) states that “the allottee agrees and understands that the definition of super area, apartment area, the tentative percentage of apartment area to super area as on the date of execution of this agreement shall be subject to change till the construction of the said building is completed. The allottee affirms that the allottee shall have no right to raise any kind of objection/dispute/claim at any time with respect to the basis of charging the total price or any change in percentage of the apartment area to the super area as mentioned in Annexure. Clause 1.9(c) states that “the allottee agrees and understands that the allottee shall be liable to pay all taxes which shall be charged and paid as follows:- (i) A sum equivalent to the proportionate share of taxes in addition to the total price. The proportionate share shall be the ratio of the super area of the said apartment to the total super area of all apartments and other buildings in the said complex. (ii) The company shall periodically intimate to the allottee, on the basis of certificates from a chartered Engineer and/or a chartered accountant and the allottee shall make payment within 30 days from the date of such written intimation. As per clause 1.9(b) and clause 1.9(c) the alolottees are liable to make payment towards increase in super area as well as service tax. The complainant has taken the contention that the claim made by opposite parties towards service tax is not legally sustainable in the light of Division Bench Judgment of Hon’ble High Court of Delhi dated 03.06.2016 in WP(c) 2235/2011 in Suresh Kumar Bansal Vs. Union of India.
21. However we note that, as pointed out by the learned counsel for the opposite party, the provisions of service tax have been made applicable to the payments effected on or after 1st July 2010 by the Central Government as per Notification No. 29/2010-service tax dated 22.06.2010. Hence the dictum laid down in the above referred judgment is not applicable to the recovery of service tax as per the notification stated supra. Thus there is no illegality on the part of opposite party in levying service tax. In the above circumstances, the complainant is liable to pay the amounts demanded towards increase in super area as well as service tax.
22. Regarding electricity connection charges it is noted that the opposite party has demanded and received Rs. 2,00,000/-towards getting sanction for electric connection. According to the opposite party the complainant is liable to pay Rs. 2,00,000/- which is permissible as per clause 1.11 of the agreement read with clause 6 of the price list and clause 1.12 of the agreement.
23. Clause 1.11 states that “(i) The allottee agrees that the company may apply and thereafter receive permission from Kerala State Electricity Board or from any other body constituted by the Govt. of Kerala for purposes to receive and distribute bulk supply of electrical energy in the said complex/said apartment, then payment as per note number ‘6’ of price list will be applicable under this item also. (ii):- The Allottee agrees that the Allottee shall make a requisition on a prescribed format to Kerala State Electricity Board authorities for obtaining service connection. The allottee agrees and confirms to adhere to the specified applicable acts, rules, norms of supply authorities and the allottee shall be liable for any default in this regard. (iii) The total price of the said apartment includes the cost of providing electric wiring, fire detection and fire fighting equipment in the common areas within the said building/said complex as prescribed in the Fire Fighting Code/Regulations under National Building Code 2005. The total price is inclusive of the cost of providing the facility of power back up which may be provided subject to timely payment of maintenance charges, not exceeding 4.00 KVA for various 3 bedroom apartments and 3.00 KVA for 2 bedroom apartments in the said complex at 80% demand factor in addition to that for the common areas and services. However DG set capacity calculation shall take into account suitable overall diversity of 65%. It is specifically made clear to the allottee that in the event of non-payment of electricity charges as billed by the company/the maintenance agency/association, the company/the maintenance agency/association shall have the right to disconnect supply of electricity without any notice. The total price of the said apartment does not include the cost of electric fittings, fixtures, etc. which shall be got installed by the allottee at his own cost.
24. However if due to any change or enactment of any legislation, laws, bylaws or government orders, directives, guidelines or change/amendments in Fire Code including the National Building Code 2005, any additional fire safety measures are required or in the sole opinion of the company or any of its nominee, additional fire safety measures are required and undertaken, then the allottee undertakes to pay within 30 days from the date of written demand by the company, the additional expenditure incurred thereon in proportion to the super area of the said apartment to the total super area of all the apartments in the said building/said complex as determined by the company and such demand raised by the company shall be final and binding upon the allottee”.
25. Clause 1.12 states that “The allottee shall pay an amount of Rs. 1,00,000/- as and when demanded by the company towards installation/connection of electricity/water/sewer services and for the incidental charges. The allottee shall pay the consumption charges of electricity and water on actual basis”.
26. On a perusal of these two clauses it is noted that there is nothing which stipulates the builders to demand more than Rs. 1 lakh towards installation of electricity charges from the allottees. Rs. 1,00,000/- mentioned in clause 1.12 includes incidental charges also. Here the complainant had deposited Rs. 2,00,000/- towards electric connection. Hence complainant is entitled to get refund of Rs. 1,00,000/-which is deposited by him as demanded by the opposite parties. This amount of Rs. 1 lakh is to be refunded to the complainant.
In the result, the complaint is allowed as follows:
- The complainant is held entitled to receive compensation of an amount of Rs. 24,09,983/- being interest on the amount of Rs. 49,18,334/- calculated @ 12% per annum from 25.06.2013 till the date of handing over of possession, 28.07.2017.
- The complainant is held entitled to refund of an amount of Rs. 25,000/- which is claimed by the opposite parties on account of car parking charges.
- The complainant is held entitled to refund of the amount of Rs. 7,000/- claimed by the opposite parties as club annual subscription charge.
- The complainant is held entitled to refund of the amount of Rs. 30,000/- claimed by the opposite parties as club membership fee and the further amount of Rs. 20,000/- claimed by them as club security charge.
- The complainant is held entitled to refund of the amount of Rs. 1,00,000/- claimed by the opposite parties towards electricity charges.
- The complainant is also held entitled to an amount of Rs. 50,000/- as costs of these proceedings.
The complainant is permitted to seek refund of the amount of Rs. 18,44,000/- deposited by him before this Commission, being the total of the amounts claimed by the opposite parties and disputed by him, to be adjusted towards the amounts to which he has been held entitled, as above. For the balance amount due to him he shall be entitled to initiate proceedings for execution of the directions in this judgment. The balance amount remaining unpaid shall carry interest @ 12% per annum if not paid within one month from the date of this judgment.
JUSTICE K. SURENDRA MOHAN : PRESIDENT
jb RANJIT. R : MEMBER
APPENDIX
I COMPLAINANT’S WITNESS:
PW1 -Romy Chacko
II COMPLAINANT’S EXHIBITS:
A1 - Copy of brochure
A2 - Copy of payment plan
A3 - Copy of schedule of payments
A4 - Copy of Apartment Buyers Agreement
A5 - Copy of payment & outstanding details
A6 - Copy of reply letter sent by complainant
A7 - Copy of letter dated 28.10.2015
A8 - Copy of letter dated 18.11.2015
A9 - Brochure
A10 - Apartment Buyers Agreement
A11 - Copy of letter dated 28.07.2017
A12 - Copy of statement of account for the period 01.04.18 to 10.11.18
III OPPOSITE PARTY’S WITNESS:
DW1 - Sayed Ebrahim. M
IV OPPOSITE PARTY’S EXHIBITS:
B1 - Copy of application form for allotment
B2 - Copy of letter dated 05.11.2008
B3 - Copy of demand notice dated 25.11.2008
B4 - Copy of reminder-1 dated 16.12.2008
B5 - Copy of reminder-II dated 31.12.2008
B6 - Copy of demand notice dated 27.01.2009
B7 - Copy of Reminder-II dated 04.03.2009
B8 - Copy of final statement of account as on 27.11.2015
B9 - Copy of letter dated 28.10.2015
B10 - Copy of letter dated 03.03.2009
B11 - Copy of demand notice dated 27.03.2009
B12 - Copy of mail dated 23.05.2009
B13 - Copy of mail dated 08.02.2010
B14 - Copy of possession letter dated 28.07.2017
B15 - Copy of acceptance of possession dated 28.07.2017
B16 - Copy of letter dated 20.01.2010
B17 - Copy of mail dated 14.04.2010
B18 - Copy of letter dated 28.06.2010
B19 - Copy of demand notice dated 27.07.2010
B20 - Copy of reminder-1 dated 27.08.2010
B21 - Copy of demand notice dated 28.09.2010
B22 - Copy of demand notice dated 03.12.2010
B23 - Copy of mail dated 09.04.2009
B24 - Copy of demand notice dated 08.07.2010
B25 - Copy of mail dated 14.04.2010
B26 - Copy of demand notice dated 16.03.2011
B27 - Copy of mail dated 18.03.2011
B28 - Copy of Reminder-II dated 28.04.2011
B29 - Copy of mail dated 04.10.2010
B30 - Copy of reminder-1 dated 17.02.2009
B31 - Copy of Reminder-II dated 17.05.2012
B32 - Copy of letter dated 10.04.2015
B33 - Copy of receipt detail dated 14.10.2008
B34 - Copy of delayed interest statement dated 09.03.2017
B35 - Copy of occupancy certificate
B36 - Copy of notification dated 22.06.2020
B37 - Copy of agreement dated 25.06.2010
JUSTICE K. SURENDRA MOHAN : PRESIDENT
jb RANJIT. R : MEMBER
