Haryana

Panchkula

CC/89/2015

Sarita Garg - Complainant(s)

Versus

M/S PARSAVNATH DEVELOPERS LTD & OTHERS. - Opp.Party(s)

R.C. Sharma

20 Oct 2015

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,  PANCHKULA.

                                                                  

Consumer Complaint No	:	89 of 2015
Date of Institution	:	13.05.2015
Date of Decision	:	20.10.2015

1.       Mrs.Sarita Garg w/o Mr.Sanjeev Garg, R/o H.No.1030/1, Sector-45-B, Chandigarh.

2.       Mr.Sanjeev Garg s/o Sh.Krishan Lal Garg, R/o H.No.1030/1, Sector-45-B, Chandigarh.

                                                                                        ….Complainants

Versus

 

1.       M/s Parsavnath Developers Ltd., Regd. Office, 6^th Floor, Arunachal Building, 19, Barakhamba Road, New Delhi-110001, through its Managing Director.

2.       Incharge, site office of M/s Parsvnath Developers Ltd. at Parsvnath Royale, Sector-20, Panchkula.

3.       Samar Associates Pvt. Ltd. Regd. Office at 254, NAC, Mani Majra, Chandigarh, through its Managing Director.

                                                                        ….Opposite Parties

 

COMPLAINT UNDER SEC. 12 OF THE CONSUMER PROTECTION ACT, 1986.

 

Before:                 Mr.Dharam Pal, President.

              Mrs.Anita Kapoor, Member.

              Mr.S.P.Attri, Member.

 

For the Parties:     Mr.R.C.Sharma, Adv., for the complainants. 

                             Mr.Amardeep Sharma, Adv., for the Ops No.1 and 2.

                             Mr.Manish Kapila, Adv., for the Op No.3.

 

ORDER

(Dharam Pal, Presi­dent)

 

1. The complainants-Sarita Garg and Sanjeev Garg have filed the present complaint against the Ops with the averments that they were in need of a flat for personal use and booked a flat No.T 7-G01 of 3 bed room in the proposed housing project for an amount of Rs.56,55,000/- and paid Rs.8,70,092/- as booking amount vide receipt dated 13.10.2010. Thereafter, the complainants paid 1^st installment of Rs.5,80,062.06 vide receipt dated 17.12.2010 as such they paid total amount of Rs.14,50,154.06 i.e. 25% of the total basic cost in the year 2010. The flat buyer agreement was signed between the parties on 07.01.2011. After perusing the flat buyer agreement, the complainant came to know that the license for development of the land was obtained by a company namely M/s Samar Estates Pvt. Ltd. and OP entered into an agreement with the landowners and acquired the development & construction rights of a group housing scheme on the project land with all the rights to carry out development & construction on the project land whereas the Op floated the group housing scheme in question namely as “Parsvnath Royle”. At the time of booking, on asking the complainants, they were assured that all leading banks should extend the loan in respect of any residential unit in that project and project would meet all the requirements to satisfy the banks for home loan against any flat in project. The complainants initially approached IDBI bank for the purpose of home loan. Despite completing the formalities, the loan was not extended by the IDBI bank and documents were returned by the bank. Though no specific reason was informed in writing but it was informed that project did not meet their parameters for extending loan. Thereafter, the complainant approached HDFC bank and it sanctioned the home loan of Rs.22,00,000/-. The complainants were also asked by the HDFC bank to provide tripartite agreement in respect of the flat in question and the complainants provided all the documents including stamp paper. After scrutinizing the documents of the project, the HDFC bank informed the complainants that there was charge in favour of Vijaya Bank with regard to the project and it would be a mandatory requirement to get no objection certificate from Vijaya Bank. After obtaining no objection certificate, the loan could be disbursed. The Ops started raising demands for deposit of installments but they failed to provide no objection certificate from Vijaya Bank. The complainants requested the Ops for providing information pertaining to the project which was to be provided to HDFC bank for the purpose of loan alongwith no objection certificate from Vijaya Bank. The complainants came to know through newspaper “Dainik Bhasker” dated 06.07.2012 that building plan was approved on 30.03.2007 and the builder was required to provide structural safety certificate within 60 days which was not provided till date. Many other discrepancies were also pointed out, causing a lot of resentment and frustration for the customers. The complainants also deposited his hard earned money to the Ops but no cooperation was forthcoming from the Ops so as to enable the complainants to get disbursement of the home loan and to make the payment towards further installments. Despite repeated requests and reminders, the Ops failed to provide the date of possession and no objection certificate from Vijaya Bank, as required by HDFC bank for disbursement of the loan. However, the OP started sending Demand Notices without fulfilling the reciprocal promises. The credibility of any builder could be better scrutinized by the financial institutions/banks in a professional manner and the demands raised by HDFC bank was quite nominal as Vijaya Bank had charge on the project, making it imperative for other banker to obtain no objection certificate before creating mortgage on the flat in same project. The complainants had booked the flat in anticipation that the builder is having all the clearances and it would be in a position to provide the necessary documents so as to enable the purchasers to avail home loan. The complainants sent 21 reminder from the year 2012 to 2015, requesting the Op to provide no objection certificate from Vijaya Bank alongwith other information but to no avail. This act of the OPs amounts to deficiency in service on their part. Hence, this complaint.
2. The Ops No.1 and 2 appeared before this Forum and filed written statement by taking some preliminary objections and submitted that the Flat Buyer Agreement imposed rights and liabilities both on the complainants and Ops which based on terms and conditions agreed and executed between the parties. The relevant clause of Flat Buyer Agreement is as under:-

“Clause 5(a) Timely payment of the installments/amounts due shall be of the essence of this Agreement. If payment is not made within the period stipulated and or the buyer commits breach of any of the terms and conditions of this Agreement, then this agreement shall be liable to be cancelled. In the eventuality of cancelation, earnest money being 15% of the basic price would be forfeited and the balance, if any, would be refundable without interest. On cancellation of the agreement, the Buyer shall also be liable to reimburse to the Developers the amount of brokerage paid, if any, by the Developers towards the booking of the Flat. In any case, all the dues, whatsoever, including interest, if any, shall be payable before taking possession of the Flat.

Clause 10 (a) - Construction of the flat is likely to be completed within a period of thirty six (36) months, of commencement of construction of the particular Block in which the Flat is located with a grace period of six (6) months, on receipt of sanction of building plans/revised building plans and approvals of all concerned authorities including the Fire Service Deptt, Civil aviation Deptt, Traffic Dept, Pollution Control Deptt, as may be required for commencing and carrying on construction. The construction period shall be subject to force majeure, restrains or restrictions from any courts/authorities, non availability of building materials, disputes with contractors/work force etc and circumstances beyond the control of the Developer and subject to timely payments of the Flat Buyers. No claim by way of damages/compensation shall lie against the Developer in case of delay in handing over possession on account of any such reasons and the period of construction shall be deemed to be correspondingly extended. The date of submitting application to the concerned authorities for issue of completion/part completion/occupancy/part occupancy certificate of the Tower shall be treated as the date of completion of the Flat for the purpose of this clause/agreement.

Clause 10 (c) – In case of delay in construction of the Flat beyond the period as stipulated subject to force majeure and other circumstances as aforesaid under sub-clause (a) above, the Developer shall pay the Buyer compensation @ Rs.53.80 per sq. Meter @ Rs.5 per sq. ft of the super area of the Flat per month for the period of delay. Likewise if the Buyer …………”

It is submitted that as per Flat Buyer Agreement, if payment was not made within the stipulated time or the buyer committed breach of any of the terms and conditions of the agreement, the agreement should be liable to be cancelled and earnest money i.e. 15% of the basic price would be forfeited & the balance if any would be refunded without interest. It is submitted that the date of final construction of the Flat of which the possession was to be delivered to the complainants, was not fixed. It is submitted that as per clause 10(a) of the Flat Buyer Agreement, the time period of construction should be 36 months from the date of commencement of construction of the particular block in which the flat was located with an additional grace period of six months. It is submitted that after approval of building plan and other approvals required for commencing construction and was aiming to complete the construction in as per the projected schedule, however, global recession which had hit the market/economy in the year 2009 which affected the real estate sector of India to a large extent. It is submitted that despite the difficulties, the Ops continued the construction of the flat and super structure of tower in which the flat of complainants was located, has been completed. It is submitted that non-completion of the project was beyond the control of the Ops and that fact was in the knowledge of the complainants. It is submitted that the complainants approached the Ops for booking of flat on their own will. It is submitted that the complainants were defaulters and have been defaulting in making the payments on time. It is submitted that the Ops had provided ROC search report by M/s Rajesh Goel & Co. confirming that there was no charge recorded over the property. It is denied that the any assurance was ever given by the Ops. It is denied that the Ops have committed a breach of the terms and conditions of Flat Buyer Agreement. It is submitted that the delay in completion of the project was not intentional and was due to global recessions whose effect still continued. It is submitted that the superstructure of the construction of tower in which the flat of the complainants was complete and the internal plaster of the tower was going on in full swing. It is submitted that the complainants were fully aware about the status of the project and also for the delay in completion of the project was due to global recession and not in hands of the Ops. It is submitted that the cancellation letter was issued after making repeated reminders to the complainants. Thus, there is no deficiency in service on the part of OPs No.1 and 2 and prayed for dismissal of the complaint with costs.

3. The Op No.3 appeared before this Forum and filed written statement. It is submitted that OP No.3 i.e. M/s Samar Estate Pvt. Ltd. have been granted Licence No.609 to 612 of 2006 under the provisions of Haryana Development and Regulation of Urban Areas Act, 1975 for development of a residential Group Housing Colony over an area of 21.75 acres falling in the revenue estate of village Kundi, Sector-20, Panchkula by the Director, Town & Country Planning, Haryana, Chandigarh out of which development rights for construction and marketing of the apartments for an area of 7.182 acres have been given by Op No.3 to Op no.1 vide agreement dated 17.02.2006. It is submitted that as per the agreement, OP No.1 has the marketing rights for the sale of apartments constructed on the land and in case of any dispute between the parties, Ops No.1 and 2 should only be responsible for the dispute arising out of the booking/sale of the apartments and the Op No.3 is not liable or responsible for any such dispute. It is submitted that the complainant’s grievance was only against the Ops No.1 & 2 which was to be decided in accordance with the terms & conditions of the Flat Buyers Agreement dated 07.01.2011 executed by the complainants with Ops No.1 & 2. It is submitted that OP No.3 is neither necessary nor a proper party. It is submitted that all the payments of booking of flat have been made by the complainant to Ops No.1 & 2. It is submitted that there is no privity of contract between the OP No.3 and the complainant. Thus, there is no deficiency in service on the part of OP No.3 and prayed for dismissal of the complaint with costs.
4. Rejoinder to the written statement of Ops No.1 & 2 has been filed by the counsel for the complainants.
5. The complainant has tendered into evidence by way of affidavit Annexure C-A alongwith documents Annexure C-1 to C-15 and closed the evidence. On the other hand, counsel for the Ops No.1 and 2 has tendered into evidence by way of affidavit Annexure R1/A alongwith documents Annexure R1/1 to R1/5 and closed the evidence. Similarly, the Op No.3 has tendered into evidence by way of affidavit Annexure R3/A and closed the evidence.
6. We have heard learned counsel for the parties and have gone through the case file as well as written submissions submitted on behalf of the complainant carefully and minutely.
7. After going through the material available on the case file, it is ample clear that the complainant had booked a residential flat bearing No.T7-G01 in the run by OP No.1 vide application dated 13.10.2010.  Learned counsel for the complainant has drawn the attention of this Forum towards Clause 18 wherein it has been mentioned that if the company is unable to deliver the unit to intending allottee, the company shall be liable to refund the amount received with interest.  He has further drawn the attention of this Forum towards Clause 19 which enables the company to raise loan from financial institution/bank the conveyance deed shall be executed only after receiving No Objection Certificate from a bank.  Learned counsel for the complainant has also drawn the attention of this Forum towards Annexure C1 wherein it has been written that the Construction is in full swing and Finance facility available from all leading banks. It has been further argued that in the advertisement it has no where been mentioned that the license for development of the land on which the project is situated was of company namely M/s Samar Estates Pvt. Limited i.e. OP No.3 and the OP No.1 has acquired the development and construction rights of a group scheme and exclusively agreed to sell the unit to the complainants. The regarding execution of agreement amongst the complainants and Op No.1 is not disputed and it is also not disputed that an amount of Rs.14,50,154.06/- has been paid by the complainants vide receipts Annexure C3 and Annexure C4. The basic price of the booked flat was Rs.56,55,000/- and the complainants had opted for construction linked payment plan, therefore, the complainants had paid more than 25 % of the total basic cost in anticipation that the work was in full swing as mentioned in the Annexure C1 (Advertisement broacher).  It has been further argued that Clause 10 (a) of the agreement is not applicable to the present case as once the construction has been claimed as in full swing therefore, the   construction must have been completed in 36 months i.e. by 17.12.2013 or latest by 17.05.2014 by adding grace period of six months.  Learned counsel for the complainants has further argued that HDFC Bank had sanctioned home loan of Rs.22 lakh vide letter dated 18.04.2011 which the part of agreement on their behalf but it were the Ops which did not issued NOC and also not refunded the deposited amount by the complainants despite demand notices Annexure C7, Annexure C8 and Annexure C10 and reminders. Learned counsel for the complainant has further argued that no construction work is in progress on the site as is evident through Annexure 13. The complainants have not committed default rather it were the Ops which failed to provide the necessary documents and even the Ops have gone beyond by issuing the impugned cancellation/forfeiture letter. The OP No.1   even could not have demanded construction installments and notice for cancellation of licence had been issued as per the news paper report.  In support of his arguments learned counsel for the complainant has relied upon case laws titled as  Haryana State Agricultural Marketing Board Vs. Bishamber Dayal Goyal and others  2014 (137) AIC 64 (SC), Puneet Malhotra Vs. Parsvnath Developers Limited  2015 (1) CLT 552 (NC), Emaar MGF Land Pvt. Limited Vs. Krishan Chander Chandra  decided on 29.09.2014 by National Consumer Disputes Redressal Commission, New Delhi in FANo.873 of 2013, Pushpak Infrastructure Pvt. Limited Vs. Santanu Mukherjee decided on 27.09.2013 by  Krishan Chander Chandra  decided on 29.09.2014 by National Consumer Disputes Redressal Commission, New Delhi in Revision Petition No.2573 of 2012, Subhash Chander etc. Vs. Parsvnath Developers Limited decided on 05.05.2014 by Krishan Chander Chandra  decided on 29.09.2014 by National Consumer Disputes Redressal Commission, New Delhi in Application No.4016 of 2013 and Shri J.L.Sethi Vs. Senior Citizen Home Complex  decided on 21.08.2006 by Krishan Chander Chandra  decided on 29.09.2014 by National Consumer Disputes Redressal Commission, New Delhi in Revision Petition No.3129 of 2005.   Per contra, it has been argued by learned counsel for the Ops that Flat Buyer Agreement imposed rights and liabilities on both the parties as depicted in Clause 5 (a), Clause 10 (a) and Clause 10 (c). However, global recession which has hit the market economy in the year 2009 which effect the Real Estate Sector of India to a large extent. The complainants had committed defaults in making the payments on time. The Ops had provided ROC search report by M/s Rajesh Goel & Co. confirming that there was no charge report over the property. The Ops have never breached any terms and conditions of Flat Buyer Agreement as the delay in completion of the project was not intentional and was due to global recessions.  The complainants were fully aware about the status of the project.
8. We carefully considered the above arguments but we are not impressed with the submission made by the Ops.  The application form Annexure R1/2 provided by the OP No.1 for booking of flat in question reveals that it does not mention that the licence for development of the land was obtained by OP No.3 and this fact came into the knowledge of the complainants at the time of executing the Flat Buyer Agreement Annexure R1/3.  Moreover, the Ops No.1 & 2 have not mentioned regarding execution of any agreement between Ops No.1 & 2 and OP No.3 at the time of inviting application for booking of the flat Annexure C1 & C2 that the licence for development for the said land is with OP No.3. It is very strange that this fact came into knowledge of the complainants after their depositing the 25 % amount of the said flat. The Ops have failed to produce any document to prove that the super structure of tower in which the flat of the complainants was located has been completed. Learned counsel for the Ops have failed to produce on the case file any evidence or document to show that this point was brought to the knowledge of the purchasers from the very beginning.   It is strange in the broacher the Ops No.1 & 2 have mentioned that the construction is in full swing but till today the Ops could not complete the projects in which the residential flats were booked by the complainants within the stipulated period.  It is settled principle of law that he who seeks equity must do equity with others but in the present matter the Ops have not acted as per law rather violated the provisions of CP Act because on one hand they have not disclosed all the material information to the complainants/purchasers but on the other hand they have also forfeited the amount deposited by the purchasers/complainants as evident through Annexure C12. Other surprising factor which this Forum has noticed that the Ops No.1 & 2 have not placed on file any document to show on which date the construction of specific tower has to be started. In the reply the Ops No.1 & 2 had admitted the date of final construction of the Flat of which the possession was to be delivered to the complainants, was not fixed. From the above it is clear that they started the construction according to their own sweet will and utilize the money received from the purchaser for the other purposes. On the other hand the Ops No.1 & 2 have submitted that super structure of tower in which the flat of complainants was located  has been completed. But no such document have been placed on file. The complainants had booked the flat on 13.10.2010 under the impression that the possession of the flat would be delivered within stipulated period keeping in view the advertisement of the Ops No.1 & 2 that the work is in full swing. The contentions of OP No.1 &2 that the complainants were defaulter in not making the payment in time is not tenable. The complainants opted the construction linked plan. From perusal of the demand notes issued by Ops No.1 & 2 there is no mention about the status /report of the project for which the complainants were liable to pay. Only they simply showed outstanding/ payment of over dues to be paid by the complainant. Moreover, the complainants got sanctioned the loan from HDFC bank but the Ops have failed to provide NOC to the complainants despite demanding the same by the complainants  and this fact is not in dispute.  The Ops had provided ROC (detailed registration of companies) search report by M/s Rajesh Duggal and company confirming that there was no charge report over the project Annexure R1/5 is totally baseless. From the perusal of above ROC search it reveals that in the ROC search it is clearly mentioned that there is two charge against the company over the property i.e. charge of Allahabad Bank and charge of Punjab & Sindh Bank of Rs.10 crore and Rs.115 crore. Perusal of the Annexure C15 reveals that the Ops No.1 & 2 were not the registered owners of the land on which the flat was booked and the land in question was the property of OP No.3. It is strange that when the Ops No.1 & 2 were not the registered owners of the land then as to why they had booked the flat and received money from the purchasers. The defence taken by the Ops is that it was a global recession that hit the India economy and for this reason they could not go ahead with the construction. He has referred to it as force measure but the Ops have not produced any data to show that there was a global recession in the Indian market and if so to what extent. In such situation, it cannot be held that the Ops were in any case affect any recession in the global economy during the relevant period. It is clear case of unfair trade practice. We are, therefore, left with no option but to held that the Ops have been highly unreasonable in not handing over the possession of the flat to the complainant within a reasonable period of time and even they have gone one step ahead by forfeiting the amount of the complainants.
9. Vide Clause 10 (a) Construction of the flat is likely to be completed within a period of thirty six (36) months, of commencement of construction of the particular Block in which the Flat is located with a grace period of six (6) months, on receipt of sanction of building plans/revised building plans and approvals of all concerned authorities including the Fire Service Deptt, Civil aviation Deptt, Traffic Dept, Pollution Control Deptt, as may be required for commencing and carrying on construction. The construction period shall be subject to force majeure, restrains or restrictions from any courts/authorities, non availability of building materials, disputes with contractors/work force etc and circumstances beyond the control of the Developer and subject to timely payments of the Flat Buyers. It is admitted case that the Ops failed to complete the construction within the aforesaid time. As per statutory approvals are concerned, the same were to be obtained by the Ops and the complainants cannot be held responsible for any delay in granting of such approvals, though, it is not the case of opposite party that the construction could not be completed for want of aforesaid statutory approval. The case of the opposite parties is that the project could not be completed on account of recession in the real estate market  and default on the part of the complainant in making the timely payment.  The terms of agreement between the parties do not justify the delay in completion of the project on the aforesaid grounds and therefore, the opposite party was duty bound to complete the construction irrespective of recession in the market, and alleged default on the part of some of the allottes in making timely payment. This is not the case of the opposite parties that the construction could not be completed due to any restriction from any court/authority or due to non availability of building material. If some of the allottes had not made timely payment, it was for the opposite party to arrange the requisite finance either by taking loan or from its own resources or by liquidating inventory at a lower price, therefore, the delay in completion of the project cannot be justified.  
10. Since the opposite party could not complete the project in which the residential flats were booked by the complainants either within the agreed time of 36 months or even within the reasonable time thereafter, and even today the projects are nowhere near completion, the complainants are entirely justified in seeking refund of the amount which they had paid to the opposite party because this Clause has been drafted in a manner having potential to mislead the prospective flat buyer not confirming till date any firm date of handing over of the possession of the flat amount to deceptive practice which falls within the meaning of unfair trade practice as defined under the CP Act. The Ops should have given firm date of handing over possession at the time of taking of booking amount itself. But by not indicating the true picture with regard to their project to the complainants the Ops induced them to part with their hard earned money, which also amounts to unfair trade practice.   
11. Before we conclude, we must record our disapproval of the manner of conduct exhibited by the OPs in the matter of causing unjustified delay in delivering the possession of the flat to the complainant and further also in the matter of making pleadings based upon apparently indefensible foundational premise. Though the adjudication of this complaint is on the merits of its own, it is a matter of public knowledge that instances are available aplenty wherein the builders have been proved to have taken the flat applicants for a ride, on one pretext or the other. There are reports in the print-media from time to time that such like aberrant builders are getting burdened with damages etc. at the hands of the consumer dispensation. It is time the builders community realizes that any delay in delivery of a habitable flat causes emotional as also economic trauma to the persons who has booked it. There could be no worse exemplification of a un-business like act than the OPs having gone in for booking even before the necessary approvals for the project etc. had been obtained. The complainants have fully proved on the case file that the Ops had violated the provisions of CP Act by leading cogent and reliable evidence, therefore, the complaint deserves acceptance.
12. For the reasons recorded above, we find merit in the complaint and the same is hereby allowed and the letter dated 10.02.2015 whereby the Ops have forfeited the amount deposited by the Ops is hereby declared null and void and has been set aside.  The Ops are further directed as under:-

(i)      To make the payment of Rs.14,50,154.06 deposited by the complainants alongwith interest @ 9 % from the date of deposit of the amount.

(ii)     To make payment of an amount of Rs.1,00,000/- to the complainants as compensation for harassment, mental agony, unfair trade practice and deficiency in service.

(iii)    To make the payment of Rs.5,000/- for litigation expenses.

13. This order shall be complied with by the ops wite amount by the complainants till realization besides complying with the directions at serial No.2 and 3 above. A copy of this order be supplied to both the parties free of costs.  File be consigned to records after due compliance.

 

 

Announced

20.10.2015 S.P.ATTRI          ANITA KAPOOR                   DHARAM PAL

                     MEMBER           MEMBER                      PRESIDENT

 

Note: Each and every page of this order has been duly signed by me.

 

                                          

                                            

                                                DHARAM PAL                                                                                         PRESIDENT