Chandigarh

StateCommission

CC/167/2017

Anant Deep Singh Sarkaria - Complainant(s)

Versus

M/s Omaxe Limited - Opp.Party(s)

Vikas Kuthiala, Adv.

13 Oct 2017

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint Case No.	:	167 of 2017
Date of Institution	:	21.02.2017
Date of Decision	:	13.10.2017

 

1. Anant Deep Singh Sarkaria S/o Sh. S. S. Sarkaria, aged about 43 years R/o House No.51, Sector 28-A, Chandigarh.

 

2. Nimar Sarkaria D/o Sh. S. S. Sarkaria, aged about 37 years, R/o House No.51, Sector 28-A, Chandigarh.

……Complainants.

Versus

1. M/s Omaxe Limited having its Regional Office at S.C.O No.143-144, Sector 8-C, Madhya Marg, Chandigarh-160008, through its Regional Head.

 

2. M/s Omaxe Chandigarh Extension Developers Pvt. Ltd. having its Regional Office at S.C.O No.143-144, Sector 8-C, Madhya Marg, Chandigarh-160008, through its Regional Head.

 

              .... Opposite Parties

 

Complaint under Section 17 of the Consumer Protection Act, 1986.

 

BEFORE: MR. DEV RAJ, PRESIDING MEMBER.

                MRS. PADMA PANDEY, MEMBER

 

                  Argued by:      

 

Sh. Vikas Kuthiala, Advocate for the complainants.

Sh. Munish Gupta, Advocate for the Opposite Parties.

 

PER DEV RAJ, PRESIDING MEMBER.

                The facts in brief are that the complainants purchased a unit measuring 300 sq. yards with constructed area measuring 1725 sq. feet. thereupon at ground floor bearing No.OCIF/Ground/758 in the project of the opposite parties, under the name and style of “Omaxe Cassia”, Mullanpur, LPA (GMADA), Distt. S.A.S. Nagar, Mohali, for their personal use and habitation. The total cost of the unit, in question, was Rs.53,59,995.25 as mentioned in the allotment letter dated 28.12.2012 (Annexure     C-1). 

2.             It was further stated that the complainants opted for construction linked payment plan under Plan A and they initially paid Rs.8 Lacs for the said unit vide receipt dated 10.02.2011 (Annexure C-2). Subsequently, the complainants paid payments vide receipts (Annexures C-3 to C-10). The complainants, in all, paid an amount of Rs.48,39,994.15 and the total outstanding amount as payable by the complainants to the Opposite Parties is Rs.2,71,701.37, which is about 5% of the total payable amount for the said unit at the time of offer of possession. 

3.             It was further stated that as per Clause 23 (b) of the Agreement, possession of the constructed unit, complete in all respects, was to be delivered within a period of 30 months (24 months + 6 months) i.e. on 28.06.2015. It was further stated that the Opposite Parties sent letter dated 30.12.2016 (Annexure C-12), whereby demand of total outstanding amount of Rs.2,71,701.37, was raised. It was further stated that the Opposite Parties did not offer possession of the unit, in question, up till 30.12.2016. It was further stated that the Opposite Parties vide letter dated 19.01.2017 (Annexure C-13) offered possession of the unit, in question, and raised demand of an amount of Rs.8,11,629.75. It was further stated that the Opposite Parties were not in a   position to hand over possession of the unit, in question, complete in all respects. It was further stated that the Opposite Parties did not complete the entire development work at the site and also have not obtained the completion certificate of the site from the State Government. It was further stated that the possession of the unit, as offered by the Opposite Parties, vide letter dated 19.01.2017 is nothing but sham and an eyewash.

4.             It was further stated that as per Clause 23(h) of the allotment letter, the Opposite Parties were liable to pay an amount of Rs.10/- per sq. ft. per month of the super area to the complainants for such period of delay beyond 24 months from the date of the allotment letter dated 28.12.2012. It was further stated that till date, the Opposite Parties were liable to pay an amount of Rs.3,27,750/- @Rs.17,250/- per month from 28.12.2015 till 28.01.2017 and also in future till the date of actual possession of the unit, complete in all respects, with all requisite permissions and completion from competent authority. It was further stated that the Opposite Parties have miserably failed to complete the construction and develop the unit as allotted to the complainants and also failed to fulfill their part of the duty and obligation as per allotment letter dated 28.12.2012. It was further stated that the aforesaid acts and conduct of the Opposite Parties amounted to negligence, deficiency in rendering service and adoption of unfair trade practice on their part.

5.             When the grievance of the complainants, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act, 1986 (hereinafter to be called as ‘1986 Act’), was filed, seeking directions to the Opposite Parties, to hand over the possession of the unit, in question, complete in all respects, after obtaining all the necessary permissions; pay interest @24% p.a. on Rs.48,39,994.15 beyond 28.06.2015, the date of handing over of possession; pay Rs.10/- per sq. ft. per month of the super area for delay beyond 24 months; pay Rs.5 Lacs as compensation towards mental harassment, agony suffered by the complainant and Rs.55,000/- towards litigation costs.

6.             The Opposite Parties, in their written statement, took up certain preliminary objections to the effect that in terms of Clause No.41 of the allotment letter, the dispute ought to be referred to Arbitration under Section 8 of the Arbitration & Conciliation Act, 1996; that this Commission has got no territorial and pecuniary jurisdiction; that the complainants would not fall within the definition of a “consumer” as defined under Section 2(1)(d) of the Act, as they had purchased the flat, in question, for the purpose of investment; that the complainants are guilty of suppression very and suggestion falsi as they have concealed vital facts and documents and that the complaint is liable to be dismissed as the complainants have not sought permission under Section 12(1)(c) of the Act, for filing joint complaint.

7.             On merits, it was stated that the area and the unit number were tentative as detailed in the Buyer’s Agreement. It was further stated that as far as the price was concerned, the same was not mentioned in detail and Annexure A of allotment letter clearly depicted the cost and other charges payable by the complainants. It was further stated that the complainants had to be reminded again and again for making payment but they always delayed the payment of installments. It was denied that only an amount of Rs.2,71,701/- was payable by the complainants as balance amount. It was further stated that possession was offered, as per the terms of the agreement. It was further stated that vide letter dated 30.12.2016, demand was raised qua installment No.10 but the complainants showed their reluctance to make the said payment and ultimately, vide letter dated 19.01.2017, possession was offered to the complainants for carrying out necessary interior/fit-out works. It was further stated that the complainants denied payment, as demanded vide letter dated 30.12.2016, thereby disobeying the agreed terms and conditions entered into between the parties, which provided that the complainants shall make payment as per schedule and, as such, they (complainants) are not entitled to any relief as prayed for.

8.             It was further stated that offer of possession made vide letter dated 19.01.2017, was specifically mentioned to be for the purposes of carrying out interior/fit-out works. It was denied that no permission had been obtained by the Opposite Parties or that entire development work at the site, was not complete. The offer of possession cannot be said to be a sham or eye wash. It was further stated that since the complainants did not follow the schedule of payment and delayed payment at almost every step, they are not entitled to invoke Clause 23(h) seeking Rs.10/- per square feet per month, as penalty. It was further stated that the said clause is to be read alongwith other clauses of the Agreement, which provided that payments were to be made by the complainants in time as per schedule as and when demanded but since the complainants failed to do so, they were not entitled to invoke Clause 23(h). It was further stated that terms and conditions and even duties and obligations of the allotment letter dated 28.12.2012, have been fully complied with in entirety by the Opposite Parties and therefore, the complainants are not entitled to any relief. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor they indulged into any unfair trade practice. The remaining averments, were denied, being wrong.

9.             An application under Section 8 of the Arbitration and Conciliation Act, 1996, bearing No.509 of 2017 was also filed by the Opposite Parties, stating that this Commission has no jurisdiction to entertain the consumer complaint and let the matter be referred to Arbitration for adjudication. The said application was disposed of by this Commission vide order dated 05.05.2017, by observing that the applicability of arbitration process would be seen at the time of final arguments in the main case.     

10.           The complainants filed rejoinder, wherein, they reiterated all the averments, contained in the complaint and repudiated those, as contained in the written version of the Opposite Parties.

11.           The parties led evidence in support of their case.

12.           We have heard the Counsel for the parties and have gone through the evidence and record of the case, very carefully.

13.           It is evident on record that the complainants were allotted an independent floor bearing No.758, Ground Floor, having super area admeasuring approx. 1725 sq. ft. in OMAXE CASSIA situated at Mullanpur LPA (GMADA), Distt. SAS Nagar. The allotment letter/terms and conditions were executed between the complainants and the Opposite Parties on 28.12.2012 (Annexure C-1). It is also evident from Annexure-B (Part – II) (Page 43 of the file) that the complainants opted Plan A: Construction Linked Plan (CLP) and payment was to be made as per stages of construction. The complainants, in all, paid an amount of Rs.48,39,994.15 against the total sale consideration of Rs.53,59,995.25 and also paid service tax to the tune of Rs.1,45,538.85, as is evident from statement of account dated 30.12.2016 (Annexure C-12). Further, in terms of this Commission order dated 23.02.2017, out of total demand of Rs.8,11,629/- raised vide offer of possession letter (Annexure C-13), the complainants made payment of 50% of the demand. As per Clause 23(b) of the Allotment Letter aforesaid, the Opposite Parties were to complete the development/construction of the Unit, in question, within 24 months or within an extended period of 6 months i.e. 30 months from the date of signing of the Allotment Letter.

14.           The first question, that falls for consideration, is, as to whether, in the face of existence of arbitration clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint. It may be stated here that this Commission in case titled ‘Sarbjit Singh Vs. Puma Realtors Private Limited’, IV (2016) CPJ 126, noted that litigation in the Consumer Fora is cost effective. The complaint in the State Commission can be filed by making payment between Rs.2,000/- to Rs.4,000/- only. Whereas, as per principal Act (1996 Act), the consumer will be forced to incur huge expenses towards his/her share of arbitrator’s fee. As per mandate of 1986 Act, a complaint is proposed to be decided within three months from the date of service of the other party. On the other hand, it is admissible to an Arbitrator to decide a dispute within one year. Thereafter, the Court wherever it is challenged may also take upto one year and then there is likelihood that the matter will go to the High Court or the Hon'ble Supreme Court of India. Such an effort will be a time consuming and costly one. Taking note of fee component and time consumed in arbitration, it was observed that if the matter is referred to an Arbitrator, it would defeat the very purpose of the provisions of 1986 Act. Paras 26, 33 and 34 of the said order, inter-alia, being relevant, are extracted hereunder:-

“26.      To decide above said question, it is necessary to reproduce the provisions of  Section 3 of the Consumer Protection Act 1986 (in short the Act), which reads as under;

“3. Act not in derogation of any other law.—

The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.”

33.        The 1986 Act provides for better protection of interests and rights of the consumers. For the said purpose, the Consumer Foras were created under the Act. In Section 3 of 1986 Act, it is clearly provided that the said provision is in addition to and not in derogation of any provisions of any other law, for the time being in force. The 1986 Act is special legislation qua the consumers. The poor consumers are not expected to fight the might of multinational companies/traders, as those entities have lot of resources at their command. As stated above, in the present case, the complainant has spent his entire  life earnings to purchase the plot, in the said project, launched by the opposite party. However, his hopes were shattered, when despite making substantial payment of the sale consideration, he failed to get possession of the  plot, in question, in a developed project. As per ratio of the judgments in the case of Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (2004) 1 SCC 305 and United India Insurance Co. Ltd. Vs. M/s Pushpalaya Printers, I (2004) CPJ 22 (SC),  and LIC of India and another Vs. Hira Lal, IV (2011) CPJ 4 (SC), the consumers are always in a weak position, and in cases where two interpretations are possible, the one beneficial to the consumer needs to be accepted. The opinion expressed above, qua applicability of Section 8 (amended) of 1996 Act, has been given keeping in mind the above said principle.

34.        Not only this, recently, it was also so said by the National Commission, in a case titled as Lt. Col. Anil Raj & anr. Vs. M/s. Unitech Limited, and another, Consumer Case No.346 of 2013, decided on 02.05.2016. Relevant portion of the said case, reads thus:-

“In so far as the question of a remedy under the Act being barred because of the existence of Arbitration Agreement between the parties, the issue is no longer res-integra.  In a catena of decisions of the Hon’ble Supreme Court, it has been held that even if there exists an arbitration clause in the agreement and a Complaint is filed by the consumer, in relation to certain deficiency of service, then the existence of an arbitration clause will not be a bar for the entertainment of the Complaint by a Consumer Fora, constituted under the Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force. The reasoning and ratio of these decisions, particularly in  Secretary, Thirumurugan Cooperative Agricultural Credit Society Vs. M. Lalitha  (Dead) Through LRs. & Others  - (2004) 1 SCC 305; still holds the field, notwithstanding the recent amendments in the Arbitration and Conciliation Act, 1986.  [Also see: Skypak Couriers Ltd. Vs. Tata Chemicals Ltd. - (2000) 5 SCC 294 and National Seeds Corporation Limited Vs. M. Madhusudhan Reddy & Anr. - (2012) 2 SCC 506.] It has thus, been authoritatively held that the protection provided to the Consumers under the Act is in addition to the remedies available under any other Statute, including the consentient arbitration under the Arbitration and Conciliation Act, 1986.”

 

                Same is the ratio of recent judgment passed by three Judges Bench of Hon’ble National Commission on 13.07.2017 in case titled ‘Aftab Singh Vs. Emaar MGF Land Ltd. & Anr.’ III (2017) CPJ 270 (NC).

                In  view of the above, the plea taken by the Opposite Parties, that in the face of existence of arbitration clause in the Allotment letter, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint, being devoid of merit, is rejected.

15.           The next question that falls for consideration, is, as to whether, this Commission has got territorial jurisdiction to entertain and decide the complaint or not. According to Section 17 of the Act, a consumer complaint can be filed, by the complainants, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to them. In the instant case, it is evident from the record, that offer of possession letter dated 19.01.2017 (Annexure C-14) was sent by the Opposite Parties from their Chandigarh Office i.e. “Omaxe Limited, SCO 139-140, Sector 8-C, First Floor, Madhya Marg, Chandigarh” and it also bears the Chandigarh Stamp. Further in Clause 41 of the Allotment Letter, it has been stipulated that “…..The Courts at Chandigarh and Delhi alone shall have jurisdiction in all matters arising out of/touching and/or in connection with this allotment.” Since, as per the documents, referred to above, a part of cause of action arose to the complainants, at Chandigarh, this Commission has got territorial Jurisdiction to entertain and decide the complaint.  The objection taken by the opposite parties, in their written version, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected. 

16.           Another objection taken by the opposite parties, with regard to pecuniary jurisdiction of the Commission, also deserves rejection. It may be stated here, that the complainants have sought possession of the flat, in question, price whereof, as per Cost details of the unit, at Page 42 of the file is Rs.53,59,995.25. In the instant case, delay in offering possession is of around 2½ years. By taking cost of the unit and adding interest @24% p.a. on the deposited amount of Rs.48,39,994.15 for the delay period; compensation @Rs.10/- per sq. ft.; compensation of Rs.5 Lacs, for mental harassment and agony, litigation cost of Rs.55,000/-, the sum total is less than Rs.One Crore. In no way, the value and reliefs claimed exceed Rs.1 crore. Even otherwise, the Opposite Parties have not furnished any calculation or detail qua the value and reliefs claimed exceeding Rs.1 crore. Thus, this Commission has got pecuniary Jurisdiction, to entertain and decide the complaint. In view of the above, the objection taken by the opposite parties, in this regard, being devoid of merit, must fail and the same stands rejected.

17.           The next question that falls for consideration, is, as to whether, the complainants are investors, or they have purchased the said flat for their residential purpose. In the first instance, it may be stated here that by way of filing this complaint, the complainants are seeking possession of the flat, in question. At the same time, there is nothing, on record, to show that the complainants are the property dealer(s), and deal in the sale and purchase of property, on regular basis, and as such, the unit, in question, was purchased by them, by way of investment, with a view to resell the same, as and when, there was escalation in the prices thereof.  Thus, in the absence of any cogent evidence, in support of the objection raised by the opposite parties, mere bald assertion i.e. simply saying that the complainants being investors, did not fall within the definition of a consumer, cannot be taken into consideration. In a case titled as Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developer Pvt. Ltd. 2016 (1) CPJ 31, by the National Consumer Disputes Redressal Commission, New Delhi, it was held that the buyer(s) of the residential unit(s), would be termed as consumer(s), unless it is proved that he or she had booked the same for commercial purpose. Similar view was reiterated by the National Commission, in DLF Universal Limited Vs Nirmala Devi Gupta,  2016 (2) CPJ 316. Not only above, recently under similar circumstances, in a case titled as “Aashish Oberai Vs. Emaar MGF Land Limited”, Consumer Case No.70 of 2015, decided on 14 Sep. 2016, the National Commission, while rejecting similar plea raised by the builder, observed as under:-

“In the case of the purchase of the house which a builder undertakes to construct for the buyer, the purchase can be said to be for a commercial purpose where it is shown, by producing evidence, that the buyer is engaged in the business of a buying and selling of houses and or plots as a trading activity, with a view to make profits by sale of such houses or plots. A person cannot be said to have purchased a house for a commercial purpose only by proving that he owns or had purchased more than one houses or plots. In a given case, separate houses may be purchased by a person for the individual use of his family members. A person owning a house in a city A may also purchase a house in city B for the purpose of staying in that house during short visits to that city. A person may buy two or three houses if the requirement of his family cannot be met in one house. Therefore, it would not be correct to say that in every case where a person owns more than one house, the acquisition of the house is for a commercial purpose. In fact, this was also the view taken by this Commission in Rajesh Malhotra & Ors. vs. Acron Developers Pvt. Ltd. &Ors. First Appeal No.1287 of 2014 decided on 05.11.2015.”

 

Therefore, in view of law settled by the National Commission in the aforesaid cases, the complainants fall within the definition of ‘consumer’, as defined under Section 2(1)(d) of the Act. Such an objection, taken by the Opposite Parties, in their written reply, therefore, being devoid of merit, is rejected.  

18.          The next objection raised by the Opposite Parties is that the complainants are guilty of suppression very and suggestion falsi and the complaint ought to be dismissed on this ground alone as the complainants have concealed vital facts and documents. It may be stated here that no details/explanation, as to how and in what manner, there is suppression and concealment, have been given. Thus, the objection raised by the opposite parties, being only a bald assertion, stands rejected.

19.          The next objection raised by the Opposite Parties is that since the complainants did not file application seeking permission to file joint complaint, therefore, the present complaint is not maintainable. The objection taken is too technical. The objection is not sustainable in view of the fact that in Para 1 of the complaint, it has been clearly averred that complainant No.1 is living with his father in his house at Chandigarh whereas complainant No.2 is the real sister of complainant No.1. The complaint is signed by both the complainants. Being members of the same family and that too in blood relation, there was no necessity to seek permission for filing the present complaint jointly. The complaint filed is maintainable. The objection raised, being devoid of merit, stands rejected.

20.          The next question, which falls for consideration, is, as to whether there is delay in offering/delivering possession of the unit, in question and if so, whether the complainants are entitled to compensation by way of interest on the deposited amount, after the due date of possession, till possession was actually delivered. Admittedly, the Allotment Letter was executed on 28.12.2012. As per Clause 23(b) of the Allotment Letter/Agreement, the Opposite Parties were to deliver possession of the unit, in question, within 24 months or within extended period of six months, from the date of signing of the said Agreement/Allotment letter. As per terms and conditions and position stated above, possession of the unit, in question, was to be delivered by 27.06.2015. However, it was not done. Possession of the unit, in question, was offered vide letter dated 19.01.2017 (Annexure C-14) and physical possession to the complainants was delivered on 17.06.2017. The Counsel for the Opposite Parties argued that delay in delivering possession can at best be up-to 19.01.2017. The Counsel for the complainants argued that as admitted by the Opposite Parties in written statement, possession offered was for the purpose of carrying out interior/fit-out works. It was argued that possession was not ready and the Opposite Parties took time to complete the unit.

21.          It is apparent from record that on 23.02.2017, when the complaint was taken up for the first time, Counsel for the complainants stated that to show their bonafide, the complainants were ready to deposit 50% of the amount claimed vide letter dated 19.01.2017 (Annexure C-14). It was further stated that though the floor, in question, is complete, however, there is no access road available. This Commission directed that on depositing 50% amount by the complainants within three weeks from 23.02.2017, the Opposite Parties would hand over actual physical possession of the unit, in question, to the complainants before the next date of hearing. On the next date of hearing i.e. 31.03.2017, complainant No.1 appeared in person and stated that in terms of order dated 23.02.2017, the amount stood paid on 21.03.2017, however, possession was not delivered by the Opposite Parties. The matter was adjourned to 18.04.2017, on which date, following order was passed by this Commission:-

        “It is stated that in terms of order dated 23.02.2017, cheque for the requisite amount was handed over and the same has been encashed on 21.03.2017 by the Opposite Parties. It is further stated that in compliance to above said order, possession has not been handed over.

        Today, Sh. Nihal Singh, Advocate has filed his Vakalatnama on behalf of the Opposite Parties, which is taken on record. He states that possession will be delivered within seven days from today. We make it clear that in case, it is not so done, for committing failure of interim order, proceedings under Section 25(1) & (2) of Consumer Protection Act, 1986 will be initiated.

        The complainants may approach the Opposite Parties on any working day to get possession, as directed.

        Counsel for the Opposite Parties seeks one more opportunity to file reply/evidence, to which, no objection has been raised by the Counsel for the complainants. Last opportunity is granted to do the needful. He may do so on or before the next date of hearing with advance copy to the Counsel opposite.

        On request, adjourned to 05.05.2017.

        The complainants may also file evidence/affidavit on or before the next date of hearing, with advance copy to the Counsel opposite.”

               

22.           On the next date of hearing i.e. 05.05.2017, Counsel for the Opposite Parties stated that in response to order dated 18.04.2017, possession was offered to the complainants. It was further stated that the complainants indicated some defects/snags, which are under correction and after removing those defects/snags, possession would be delivered to the complainants within three weeks from the date of passing of the order dated 05.05.2017. The possession of the unit, in question, as admitted by Counsel for the parties, stood delivered on 17.06.2017.

23.           Thus, despite deposit of 50% amount by the complainants, there was delay in delivering possession. It means that unit was not ready for possession when possession was offered on 19.01.2017. By making a misleading statement, that possession of the flat, will be delivered within the maximum period of 24 + 6 months from the date of Allotment Letter/Agreement i.e. latest by 27.06.2015, and not abiding by the commitment made, the opposite parties were not only deficient, in rendering service, but also indulged into unfair trade practice. There is, thus, clear delay of around 2 years beyond the stipulated date (27.06.2015) for handing over possession.

24.           It may be stated here that the Hon’ble National Commission in the case of Shri Suman Nandi & Anr. Vs. M/s Unitech Limited & Anr., Complaint No.277 of 2013, decided on 17.12.2015, held in Para 16 as under:-

“16.       On perusal of the Buyer’s Agreement and the affidavits filed by the parties it is clear that the complainants had booked the subject apartments on the expressed promise extended by the opposite parties that subject to Force Majeure, the opposite parties would deliver the possession of the apartments complete in all respect within 30-36 months, as the case may be, of the execution of the Buyers Agreement and being influenced by the said promise the complainants entered into the contract. No doubt in the Buyer’s Agreement some scope for delay due to unavoidable circumstances was kept in mind for which clause 4.a. for compensating the complainants for delay was incorporated but it does not mean that the intention was that even in the event of inordinate delay in completing the construction and delivering the possession, the complainants would be entitled to meagre compensation of Rs.5/- per sq. ft. per month which is much less than the bank rate for loan or fixed deposit. Therefore, in our considered view clause 4.a. was meant for computing compensation in case of a minor delay in delivery of possession.   If the argument of the opposite party is to be accepted, it would lead to absurd situation and would give an unfair advantage to the unscrupulous builder who might utilize the consideration amount meant to finance the project by the buyer for his other business venture at nominal interest of 2-3 per cent as against much higher bank lending rates.  This could never be the intention of legislation that if such a proposition is accepted, it would result in defeating the object of Consumer Protection Act.”

 

The National Commission granted 12% interest as compensation from the date of default in delivery of possession.

25.           Recently in Capt. Gurtaj Singh Sahni & anr. Vs Manager, Unitech Limited & anr., consumer complaint bearing no.603/2014, decided on 02.05.2016, the Hon’ble National Commission, directed the opposite party/builder to pay interest on the deposited amount, for the period of delay, till delivery of possession of the unit. Relevant contents of the said order read thus:-

“8.   If the compensation for the delay in construction is restricted to what is stipulated  in  the  Buyers  Agreement, there will be no pressure upon the builder to complete the construction since he will be more than happy to keep on paying paltry compensation of about 3% per annum of the capital investment, instead of arranging funds at much higher cost, to complete the construction.

9.      xxxxxxxxxxxxx

10.    For the reasons stated hereinabove, the complaints are disposed of with the following directions:

(1)         xxxxxxxxxxxxxx

(2)     The opposite party shall pay compensation in the form of simple interest @ 12% per annum from the expected date of possession till the date on which the possession is actually offered to the complainants after completing the construction in all respects and obtaining the requisite completion certificate.

(3)   No separate compensation would be payable to the complainants either towards the rent if any paid by them or for the mental agony and harassment which they have suffered on account of the failure of the opposite party to perform its contractual obligation.”

 

26.         No doubt, in the Agreement, some scope for delay due to unavoidable circumstances was kept in mind, for compensating the complainants for delay, but it does not mean that the intention was that even in the event of inordinate delay, in completing the construction and delivering the possession, the complainants would be entitled to meagre compensation of Rs.10/- per sq. ft. per month, which is much less than the bank rate for loan or fixed deposit. Therefore, in our considered view, Clause 23(h) was meant for computing compensation, in case of a minor delay in delivery of possession.  

27.          Thus, keeping in view the principle of law laid down by the Hon’ble National Commission, in the cases, referred to above, and position stated above, grant of compensation in the form of simple interest @11% p.a. on the deposited amount for the period of delay beyond the stipulated date in handing over of possession viz. 28.06.2015, till 17.06.2017, the date of delivery of possession of the unit, would meet the ends of justice. The complainants are, accordingly, held entitled to compensation by way of interest @11% per annum (simple) w.e.f. 28.06.2015 till 17.06.2017. Though the complainants have also claimed compensation @Rs.10/- per sq. ft. per month but since they (complainants), by granting 11% interest (simple) for the delayed period, have been sufficiently compensated, there is no justification for allowing the same.

28.           The next question, which falls for consideration, is, as to what amount is payable by the complainants to the Opposite Parties. While offering possession vide letter dated 19.01.2017, the Opposite Parties raised demand in the sum of Rs.8,11,629/-. As already stated above, in terms of this Commission order, the complainants paid 50% of the amount. During arguments, Counsel for the Opposite Parties stated that club membership charges in the sum of Rs.50,000/- and club membership charges (multi club) (revised) in the sum of Rs.1,00,000/-  are separate and distinct. Counsel for the complainants stated that the complainants would only be availing facility of club for which they have already paid a sum of Rs.50,000/- and they were not interested in the club membership (Multi club) (revised) and, therefore, a sum of Rs.1 Lac is not payable by them. Thus, the amount payable by the complainants comes to Rs.3,05,815.00 [i.e. Rs.8,11,629.00 (-) minus 50% already paid (-) minus Rs.1,00,000.00]. The complainants are, therefore, liable to make payment of a sum of Rs.Rs.3,05,815/- to the Opposite Parties within a period of one month from the receipt of certified copy of this order, failing which, they would be liable to pay interest @11% (simple) per annum till payment is made. 

29.           On account of non-delivery of legal physical possession of the unit, in question, by the Opposite Parties, to the complainants, within the stipulated period, the complainants have certainly suffered physical harassment and mental agony, for which, they (complainants) need to be suitably compensated. In our considered opinion, compensation in the sum of Rs.1,50,000/- would be just and adequate, to meet the ends of justice.               

30.           No other point, was urged, by Counsel for the parties.

31.           For the reasons recorded above, the complaint is partly accepted, with costs. The Opposite Parties are, jointly and severally, directed as under:-

1. To execute and get registered the sale deed, in respect of the unit, in question, in favour of the complainants, within two months, on payment of registration and stamp duty charges etc., by them.
2. To pay compensation, by way of interest @11% p.a. (simple), on the deposited amount (Rs.48,39,994.15), to the complainants, from 28.06.2015 till 16.06.2017, within two months, from the date of receipt of a certified copy of this order, failing which, the said amount shall carry penal interest @13% p.a. (simple), instead of 11% p.a., from the date of filing the complaint till realization.
3. To pay compensation, in the sum of Rs.1,50,000/-, on account of mental agony, physical harassment & deficiency in providing service and Rs.33,000/-  as cost of litigation, to the complainants, within two months from the date of receipt of a certified copy of this order, failing which, the same shall carry interest @11% p.a. (simple), from the date of filing the complaint till realization.

32.           Certified Copies of this order be sent to the parties, free of charge.

33.           The file be consigned to Record Room, after completion.

Pronounced.

13.10.2017.

 

  (DEV RAJ)

PRESIDING MEMBER

 

 

 

 (PADMA PANDEY)

          MEMBER

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