2. Housing Development Finance Corporation Limited, SCO 153-155, Sector 8C, Madhya Marg, Chandigarh, through its Manager. Ph. No.0172-6676900, 8962767.

…..Opposite party  no.2

Complaint under Section 17 of the Consumer Protection Act, 1986

BEFORE:              JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT.

                             MRS.PADMA PANDEY, MEMBER

                             MR. RAJESH K. ARYA, MEMBER.

Present through Video Conferencing:-

                             Sh.A.P. Bhandari, Advocate for the complainants.

                             Sh.Sandeep Kumar, Advocate for opposite party no.1.

                             Ms.Rupali Shekhar Verma, Advocate for opposite party no.2.

JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

                   It is the case of the complainants that on 19.09.2011 they had booked flat bearing no.239, First Floor, measuring 1435 square feet, in a project launched by  opposite party no.1, under the name and style ‘Victoria Floor-Golf Links-II”, Sector 116, SAS Nagar, Mohali, Punjab (in short the unit), total sale price whereof was fixed at Rs.39 lacs. It has been stated that despite the fact that substantial amount of Rs.37,30,213/- stood paid by them to opposite party no.1, yet, it failed to deliver possession of the said unit by 01.11.2014  i.e. within a period of 36 months (30 months plus (+) 6 months extended period) as per Clause 5.1 of the Agreement dated 01.11.2011 (Annexure C-4) for dearth of construction and development works at the project site. During the period intervening, opposite party no.1 offered relocation to unit no.B-83 in the same project, which was not accepted by the complainants. Ultimately, the complainants were relocated to unit no.254, First Floor, in the said project, but possession thereof was also not delivered to the complainants. Number of requests made by the complainants, written as well as oral, to opposite party no.1 to deliver possession of the relocated unit, did not yield any result.

2.           It has been averred that for making payment towards price of the said unit, the complainants have availed housing loan from opposite party no.2, under subvention scheme, under which, opposite party no.1 committed to pay Pre-EMIs till possession of the unit is delivered, yet, it has also come to their knowledge that opposite party no.1 has defaulted in making payment of the said Pre-EMIs also.
3.           When, neither possession of the unit booked nor of the relocated unit was offered to the complainants, a request was made to opposite party no.1 to refund the amount paid. As such, the complainants and opposite party no.1 entered into a settlement agreement dated 25.10.2017 (Annexure C-16), vide which it was committed by opposite party no.1 that it will refund the entire amount of Rs.37,30,213/- i.e. Rs.29,25,000/- to opposite party no.2 towards repayment of loan and Rs.8,05,213/- to the complainants alongwith interest @7% p.a. till realization. It has been stated that out of the aforesaid amount of Rs.37,30,213/-, opposite party no.1 has so far paid an amount of Rs.12 lacs only i.e. Rs.4 lacs towards repayment of loan amount out of  Rs.29,25,000/- and Rs.8 lacs to the complainants out of Rs.8,05,213/-. Thereafter, despite making number of requests, opposite party no.1 failed to make the remaining payment either to them or to opposite party no.2.
4.           By stating that the aforesaid act and conduct of opposite party no.1,  amount to deficiency in providing service and adoption of unfair trade practice, this complaint has been filed by the complainants seeking directions to opposite party no.1 to make payment of remaining amount of loan to opposite party no.2 alongwith up-to-date interest; to pay remaining amount of Rs.5213/- to the complainants alongwith interest, compensation; litigation expenses etc. 
5.           The claim of the complainants has been contested by opposite party no.1, on numerous grounds, inter alia, that they have concealed material facts from this Commission; that they did not fall within the definition of ‘consumer’, as defined under Section 2 (1) (d) of the Act; that because the period of 36 months, for delivering possession of the unit was tentative, as such, time was not to be considered as essence of the contract; and that the complaint filed is beyond limitation
6.           On merits, payments made by the complainants towards the unit in question as mentioned in the complaint; execution of buyer agreement; non delivery of possession of the originally allotted unit by the promised date or even of  the relocated unit by the date when this complaint has been filed; execution of settlement agreement dated 25.10.2017; payment of only Rs.12 lacs referred to above, out of Rs.37,30,213/-; and nonpayment of the remaining amount, has not been disputed. However, it has been stated that opposite party no.1 is committed to pay Pre-EMI to  opposite party no.2, under subvention scheme till offer of possession of relocated unit is delivered to the complainants; that construction of the unit is almost complete; that opposite party no.1 has applied for completion certificate/clearance with the competent authorities; and that possession will be delivered thereafter. Prayer has been made to dismiss the complaint.
7.           Opposite party no.2 in its written version pleaded that since no specific allegations have been levelled against it, as such, it has no concern, with the dispute, qua the complainants and opposite party no.1. Receipt of Rs.4 lacs, referred to above, towards part repayment of loan amount is not disputed.  However, its Counsel pleaded that, in case, this Commission comes to the conclusion that the complainants are entitled to refund of amount paid, then first charge be ordered in favour of opposite party no.2, so that it is able to seek apportionment of its dues.
8.           This Commission has afforded adequate opportunities to the parties to adduce evidence in support of their respective contentions, by way of filing affidavit. In pursuance thereof, they have adduced evidence and also produced numerous documents.
9.           We have heard the contesting parties and have gone through the evidence and record of the case, very carefully.
10.           First we will deal with the objection raised to the effect that the complainants did not fall within the definition of  ‘consumer’. It may be stated here that the objection raised is not supported by any documentary evidence and as such the onus shifts to opposite party no.1 to establish that the complainants have purchased the unit in question to indulge in ‘purchase and sale of units/flats’ as was held by the Hon’ble National  Commission in Kavit Ahuja vs. Shipra Estates I (2016) CPJ 31 but since they failed to discharge their  onus, hence we hold that the complainants are consumers as defined under Section 2(1)(d) of the Act.
11.           There is no dispute with regard to the fact that, in the first instance, on 19.09.2011 the complainants had booked unit bearing no.239, in the project of opposite party no.1, against which it had received substantial amount of Rs.37,30,213/- against total sale consideration of Rs.39 lacs. Out of the said amount Rs.29,25,000/- was released by opposite party no.2 against the loan obtained by the complainants under subvention scheme and the remaining amount of Rs.8,05,213/- had been paid by them, from their own sources.

                   It is also not in dispute that  possession of the unit booked by the complainants was not offered to them, by the promised date i.e. 01.11.2014  (within a period of 36 months  as per Clause 5.1 of the Agreement dated 01.11.2011 (Annexure C-4) for dearth of construction and development works at the project site, as a result whereof, ultimately, they were relocated by opposite party no.1, to unit no.254, First Floor, in the same project.  It is also coming out from the record that possession of even relocated unit no.254 was not delivered to the complainants for want of construction and development activities, as a result whereof, settlement agreement dated 25.10.2017 (Annexure C-16), was executed between the parties. It is evident from Clause B. of the said settlement agreement that opposite party no.1, in a very candid manner, admitted that due to some unavoidable circumstances, the Company is not in a position to  handover/deliver possession of relocated unit no.254 FF, Victoria Floors, to the complainants. Relevant part of the said clause is reproduced hereunder:-

“That due to some unavoidable circumstances, the Second Party is not in position to handover/deliver the above mentioned Floor no.254 FF, Victoria Floors, to the First Party in accordance to allotment letter dated 5/8/2011.”

It is further evident from the contents of said settlement agreement that in view of above fact, it was committed by opposite party no.1 that it will refund the entire amount of Rs.37,30,213/- i.e. Rs.29,25,000/- to opposite party no.2 towards repayment of loan amount under subvention scheme and Rs.8,05,213/- to the complainants alongwith interest @7% p.a. till realization, latest by 24.04.2018 (180 days, from 25.10.2017). Relevant part of the said agreement is reproduced hereunder:-

2. That Second Party will refund Rs.8,05,213/- to First Party and will also pay an interest @7% p.a. w.e.f. 2014 till the date of refund of complete amount
3. That Second Party will pay Rs.3 lacs within 45 days, from execution of the agreement and balance amount including interest, as mentioned in Para above, within 180 days, from the date of execution of this agreement.
4. That amount Rs.2925000/- received from HDFC Ltd. as Loan Dis-bursement shall be refunded to HDFC Ltd. by Second Party within 180 days.

12.           Since, it is a clear-cut case of non delivery of possession of the unit in question to the complainants, for dearth of construction and development activities, which fact has not been disputed by opposite party no.1 in its written statement and also by its Counsel during pendency of this complaint, as such, this Commission will like to deal with the moot question with regard to the refund of amount to be made by opposite party no.1 to the complainants and also repayment of loan amount to opposite party no.2.

                   It is coming out from the record that, though, vide the said settlement agreement, opposite party no.1 had committed to refund the entire amount received in the manner, referred to above, latest by 24.04.2018 (180 days, from 25.10.2017), yet, out of the aforesaid amount of Rs.37,30,213/-, opposite party no.1 has so far paid an amount of Rs.12 lacs only i.e. Rs.4 lacs towards repayment of loan amount of  Rs.29,25,000/- and Rs.8 lacs to the complainants against Rs.8,05,213/-.  At the time of arguments also, Counsel for opposite party no.1 failed to give any answer, as to why the Company failed to make the balance payment, referred to above, despite making commitment vide settlement agreement (Annexure C-16). Even this much was not made clear, as to whether construction work took place at the project site or not. The facts of the case transpire that the opposite party no.1 made false representations, which were materially incorrect and were made in such a way that the complainants, to whom it was made, was entitled to rely upon it and they may act in reliance on it. The complainants are thereby involved in a disadvantageous contract with opposite party no.1 and suffered financial loss, mental agony and physical harassment. Representations/statements made at that time were believed to be true. All the facts established that from the very inception there was intent of opposite party no.1 to induce the complainants to enter into a contract and also intent to deceive them.  Infact, the acts committed by the Company are not only fraud but also amounts to misrepresentation of facts.     

                   Furthermore, there is nothing on record to show that opposite party no.1 suffered any force majeure circumstances, on account of which, construction and development work at the project site could not be completed and possession of originally allotted unit was not delivered to the complainants by the committed date, referred to above or even thereafter.  Even this much has not been proved that the originally allotted unit or the relocated one, was in existence or not. However, deficiency in providing service and adoption of unfair on the part of opposite party no.1 is writ large because even after making commitment vide the settlement agreement, referred to above, to the effect that entire amount will be refunded within a period of 180 days from 25.10.2017, yet, only part amount of Rs.12 lacs out of Rs.37,30,213/- i.e. Rs.4 lacs towards repayment of loan amount  out of  Rs.29,25,000/- and Rs.8 lacs to the complainants against Rs.8,05,213/-, has been paid by it. Under these circumstances, it could very well be said that once the terms and conditions of the said settlement deed have been violated by opposite party no.1, it cannot take any advantage out of it, by saying that the complainants are debarred from filing this consumer complaint and that the Company will offer possession of the unit shortly, after receiving completion certificate/clearances.  It is not the case of opposite party no.1 that it had fully complied with the terms and conditions of the settlement agreement, within the committed period but even then the complainants have filed this complaint.  Opposite party no.1 in the present case wants to have the cake and eat it too. It clearly shows the high-handedness of opposite party no.1 towards the poor consumers like the complainants.  It is therefore held that the act and conduct of opposite party no.1 amount to grave deficiency in providing service, negligence and adoption of unfair trade practice on its part.

13.           In the face of settlement agreement, referred to above, wherein, it has been candidly admitted by opposite party no.1 that due to some unavoidable circumstances, the Company is not in position to handover/deliver possession of even relocated unit, the plea taken by it, in its written statement to the effect that time was not the essence of contract; that construction of the unit is almost complete; and that the Company is committed to bear Pre-EMI till possession of the unit is offered; and that since the possession was to be offered latest by 2014, as such, this complaint filed is time barred; has no significant value in the eyes of law and is accordingly rejected being rendered infructuous.  Since, opposite party no.1 has failed to comply with the terms and conditions of the settlement agreement, as such, violation thereof, has attracted penal consequences against it.
14.           The complainants cannot be made to wait for an indefinite period on the bald pleas taken by opposite party no.1 that it is ready to pay compensation for the period of delay in delivering possession or that it is committed to pay Pre-EMI to opposite party no.2 from where loan has been obtained by the complainants, under subvention scheme; especially, in the face of contents of the settlement agreement, referred to above. It is well settled law that non-delivery of possession of plots/units in a developed project by the promised date is a material violation on the part of a builder and in those circumstances, the allottee is well within his/her right to seek refund of the amount paid. Our view is supported by the principle of law laid down by the Hon’ble Supreme Court of India in the case titled as Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, Civil Appeal No.12238 of 2018, decided on 02.04.2019 and also  in Fortune Infrastructure Versus Trevor D’ Lima & Ors. (2018) 5 SCC 442. As such, we are of the considered opinion that if we order refund of the entire amount paid alongwith interest, that will meet the ends of justice. 
15.           Now, we will deal with the question, as to what rate of interest should be awarded to the complainants, while ordering refund of amount paid. It is a simple case of non-delivery of possession of the unit by the builder/opposite party no.1 to the complainants, by the promised date of even thereafter. A similar question, as to what rate of interest should be granted while ordering refund of the deposited amount, in case, the builder fails to deliver possession of residential units/plots, by the stipulated date, fell for determination before the Hon`ble Supreme Court of India in H.U.D.A. Vs. Neelam Sharma, Civil Appeal no.3417 of 2003 decided on 18.08.2004. In the said case, the Hon`ble Supreme Court held that in case of refund of amount, the Interest Act would apply and 12% interest is to be granted from the date of amounts deposited till repayment. Recently also, under similar circumstances, the Hon’ble National Commission in Alok Kumar Vs. M/s. Golden Peacock Residency Private Limited & Anr., Consumer Case No. 1315 of 2018, decided on 06 Sep 2019 while ordering refund of the amount paid, awarded interest @12% p.a.  

                   Not only as above, even under Section 12 of the Punjab Apartment and Property Regulation Act, 1995, read with Rule 17 of the Rules thereunder,  it has been specifically mentioned that if the amount is to be refunded, it is to be refunded alongwith interest @12% p.a. It is therefore held that if interest @12% p.a. is awarded on the amount to be refunded to the complainants, that will meet the ends of justice.

16.           For the reasons recorded above, this complaint is partly accepted, with costs and opposite party no.1 is directed as under:-

1. To refund the entire amount, actually paid by the complainants from their own sources/pocket, at the time of booking and thereafter also, towards part price of the unit in question, alongwith interest @12% p.a., from the respective  dates of deposits onwards, after deducting the amount of Rs.8 lacs therefrom, already  paid by it to the complainants.
2. To refund the amount to the complainants, if any, paid by them to opposite party no.2, towards equated monthly installments, on the loan amount, as it was the liability of opposite party no.1, under subvention scheme, as admitted by it in its written statement also.  
3. To repay the entire loan amount to opposite party no.2, released by it in favour of the Company, in respect of the unit/relocated in question alongwith pre-EMI installments, if any due, till date, after deducting the amount of Rs.4 lacs already  paid by it to opposite party no.2 through the complainants. It is also made clear that till the time, the entire loan amount is not repaid to opposite party no.2, opposite party no.1 shall be bound to pay the equated monthly installments/Pre-EMI interest to opposite party no.2, alongwith up-to-date interest on the loan account, till realization.
4. To pay compensation for causing mental agony and physical harassment and also litigation expenses, in lumpsum, to the tune of Rs.50,000/- to the complainants.
5. The payment of amounts mentioned at sr.nos.(i), (ii) (if any) and (iv) shall be made by opposite party no.1 to the complainants within a period of 30 days from the date of receipt of a certified copy of this order, failing which the amount mentioned at sr.nos.(i) and (ii) (if any), thereafter shall carry interest @15% p.a., from the date of  default and interest @9% p.a., on the amount mentioned at sr.no. (iv) from the date of filing of this complaint, till realization, besides compliance of other directions given.
6. Complaint against opposite party no.2 is dismissed with no order as to costs, subject to directions aforesaid.

17.           Certified Copies of this order be sent to the parties, free of charge.
18.           The file be consigned to Record Room, after completion.

Pronounced.

26.05.2020

Sd/-

[JUSTICE RAJ SHEKHAR ATTRI]

PRESIDENT

Sd/-

[PADMA PANDEY]

MEMBER

Sd/-

(RAJESH K. ARYA)

MEMBER

 Rg