Delhi

StateCommission

CC/1202/2015

MONIKA DUDANI MEHTAB - Complainant(s)

Versus

M/S PARSVNATH DEVELOPERS LTD. - Opp.Party(s)

NEERAJ KUMAR JHA

09 Jul 2018

ORDER

IN THE STATE COMMISSION: DELHI

(Constituted under section 9 of the Consumer Protection Act, 1986)

 

 

Date of Hearing: 09.07.2018

                                                                                                              

                                                                   Date of decision:12.07.2018

 

 

Complaint No. 1202/2015

 

 

 

IN THE MATTER OF:

 

Ms. Monika Dudani Mehtab,

House No:128, First Floor,

Sector 16 A, Chandigarh                                               ….Complainant                                                                                                   

 

VERSUS

 

1. M/s Parsvnath Developers Ltd.,

          6^th Floor, Arunachal Building,

          19, Barakhamba Road,

          New Delhi-110001

2. Mr. Sanjeev Jain

Managing Director,

          6^th Floor, Arunachal Building,

          19, Barakhamba Road,

          New Delhi-110001        

3. Mr. Rajeev Jain

Director (Marketing)

6^th Floor, Arunachal Building,

          19, Barakhamba Road,

New Delhi-110001….Opposite Parties

 

HON’BLE  SH. O.P. GUPTA, MEMBER(JUDICIAL)

HON’BLE  SH. ANIL SRIVASTAVA, MEMBER

 

 1.   Whether reporters of local newspaper be allowed to see the judgment?            Yes     

 2.   To be referred to the reporter or not?                                                                   Yes

 

 

Present:       Complainant present in person

                   Sh. Rakesh Bhardwaj Counsel alongwith Sh. T.P.S. Chauhan and Sh. S.S. Chauhan, Counsel and Sh. Madan Dogra, Director General Manager of the Company

 

PER:           ANIL SRIVASTAVA, MEMBER (G)

JUDGEMENT

1.           Non delivery of the possession within the agreed timeframe, is the root cause of the complaint filed by Ms. Monika Dudani Mehtab, hereinafter referred to as complainant, under Section 17 of the Consumer Protection Act 1986 (the Act) against M/s Parsvnath Developers Ltd., hereinafter referred to as OPs.
2.           Facts of the case necessary for the adjudication of the complaint are these.
3.           The complainant had entered into “Flat Buyer Agreement” with the OPs on 01.03.2008 for acquiring a three Bed Room Apartment in the Project of the OP, namely, “Parsvnath Privilege” for a total sale consideration of Rs. 41,57,000/-. The important terms of agreement as arrived at between the complainant and OPs are as under:

 

Subject to the premises and covenants contained herein to be observed and in consideration of the Buyer having agreed to pay the Basic Price and other costs and charges as stipulated herein, the Developers hereby agrees to sell/transfer/allot and the Buyer agrees to acquire Residential Flat No. T2-1201 in Tower No. T2 having 1855 sq. ft. (Approxi 172.33 sq. mtrs.) of super area consisting of 3 Bed Rooms, 3 Toilets, Drawing/ Dining, Kitchen with utility, Balconies,servant room with toilet, in the said Complex to be known as “Parsvnath Privilege” (hereinafter referred to as the said “Flat” or “Residential Flat” ) to be developed and constructed on the said plot together with proportionate undivided, unidentified, impartibly interest in the land underneath the flat on lease hold basis for 90 years, w.e.f. 12^th January 2007, with rights of usage of common areas and facilities in the Complex.

The basic price of the flat shall be Rs. 41,57,000/- (Rupees one lac. Fifty seven thousand only) calculated at the rate of Rs. 2240.97 per sq. ft. (equivalent to Rs. 24121.80/- per sq. mtr.) of super area of the flat to be reduced or increased corresponding to actual area of the flat at the same time of final measurement on completion of the flat.

Fifteen percent (15%) of the Basic Price shall constitute the “Earnest Money”.

The Buyer has paid a cum of Rs. 6,00,000/- (Rupees Six Lacs only) towards the basic price as on the date of signing of this agreement, the receipt of which sum the Developer does hereby admit and acknowledge and the Buyer agrees to pay the remaining basic price and other charges in the manner indicated in the Payment Plan. The Buyer has opted for Payment Plan C.

Construction of the flat is likely to be completed within a period of 36 (Thirty Six) months from the date of commencement of construction of the particular Block in which the flat is located on receipt of all requisite approvals including sanction of building plans, environment clearances, etc. subject to force majeure and restraints/restrictions from any courts/authorities, non-availability of building materials and any circumstances beyond the control of the Developer and subject to timely payments by the Buyer. No claim by way of damages/compensation shall lie against the Developer in case of delay in handing over possession of the flat on account of the said reasons. The flat shall be deemed to be completed for the purpose of this clause/agreement when the Developer submits application/completion plans to authorities for obtaining completion certificate, which may be for the complex as a whole or in parts. Possession of the flat would be given only on clearance of the entire dues payable by the Buyer to the Developer in terms of this Agreement and after execution of the Tripartite Sub-Lease Deed.

Payment schedule as opted by the complainant is as indicated below:

At the time of booking	15%
10 quarterly instalments of 8% each starting from 3rd month from the date of booking	80%+50% of Car Parking each in 2nd and 3rd Quarter
At the time of offer of possession	5%

 

It was also agreed that the possession of the flat would be delivered by May 2010 “failing which, under clause 10(c) of the Flat Buyer Agreement the respondents were liable to pay penal charges to the complainant @ Rs. 5/sq. ft/ month starting from June, 2010, till possession thereof.

 

4.           However the complainant has alleged that despite she having made the payment as per schedule, and despite the agreed period for handing over possession of the flat having elapsed, the construction of the flat being incomplete, she could not get the possession leading to harassment on two accounts, namely, she had to make alternate arrangement for living and, secondly, proper return of the money spent by her could not be possible. She sought for the compensation for the delayed period but all her efforts done to settle the issue with the OP for the delivery of the possession or for the compensation for the delayed period, could evoke no response and the entire exercise done in this behalf proved an exercise in futility. Finally legal notice issued by the complainant on 18.06.2015 seeking refund of the amount deposited with interest could also provide no shelter to her, leading to filing of this complaint alleging deficiency in service and unfair trade practice on the part of the OP in not handing over the possession of the flat in question within the stipulated timeframe and in pocketing the amount deposited by her and praying for the relief as under:

 

1. Refund the money paid by the complainant i.e. Rs. 42,59,465/- along with interest @ 24% per annum compounded along with past, pendent lite and future interest at the rate of 24% per annum compounded till the date of actual realization of the payment.
2. Pay penalty charges at the rate of Rs. 5 per sq. ft. per month on the flat having super area of 1855 sq.ft. alongwith pendent lite and future compensation at the rate of 24% per annum for the period of delay till the date of actual realization of the amount.
3. Pay Rs. 20 lakhs to the complainant as compensation for mental agony and harassment suffered by the complainant owing to deficiency of services by the OPs.
4. Pay to the complainant litigation expenses as decided by this Hon’ble Court.
5. Any other order, relief or direction which this Hon’ble Commission may deem fit and proper under the circumstances of the case may kindly be passes in favour of the complainants and against the respondents.

 

5.           OPs were noticed and in response thereto they have filed written statement alleging suppression of material fact and resisting the complaint on various grounds, namely, the complainant having booked more than one unit in the project launched by them has transacted for the purpose of investment in which case the complainant is not a consumer, thus not entitled to raise Consumer Dispute under Consumer Protection Act 1986. Secondly, the complainant having sought the refund is required to institute a suit before the Civil Court. Thirdly the property being at Greater Noida, this Commission stationed at New Delhi lacks the territorial jurisdiction to hear and to dispose of the complaint. Fourthly, it has been emphatically stressed that OPs have not breached or violated the terms of the agreement. Fifthly, the subject matter since involving complicated question of law cannot be adjudicated by the Consumer Forum under summary proceeding. Besides, the delay in construction is owing to worldwide recession, and the worse affected sector is real estate. Finally the interest, keeping in view the provision of the interest Act 1978, can be awarded as per the provisions contained in the agreement. For this purpose submission has also been made that there exists nothing in the agreement laying down that in the event of  delay in construction, the complainant would be entitled for compensation @ Rs. 5/- per sq. ft. of the Super area for the delayed period.
6.           The complainant has filed rejoinder and affidavit rebutting the contentions raised by the OPs in the written statement and reiterating the averments contained in his complaint. The OPs have also filed their evidence by way of affidavit. Both sides have filed their written arguments in support of the contentions made in the pleadings.
7.           The complaint was listed before us for final hearing on 09.07.2018 when the complainant in person and OPs through their counsel appeared and advanced their arguments. We have perused the records of the case and given a careful consideration to the subject matter.
8.           The complainant has vehemently argued for the refund with interest as she is not interested in the possession of the flat at this belated stage. It is trite law that the complainant cannot be forced to accept the possession after the agreed period. [See Emaar MGF versus Dilshad Gill – III [2015] CPJ 329 (NC). The Hon’ble NCDRC in the matter of Jivitesh Nayal and Anr versus Emaar MGF Land Ltd. as reported in IV[2017] CPJ 493 (NC) is pleased to hold as under:

 

“If the builder whose services are engaged by a buyer for construction of a residential house for him fails to complete the construction and does not deliver its possession by the date committed by him for the purpose, such an act on the part of the builder would be an act of negligence, causing loss or injury to flat buyer...... Had OPs delivered possession of flats within the time stipulated for the purpose, complainants would have been enjoying use and possession of flats booked by him. Deprivation of user of a self owned house amounts to a serious injury to flat buyer who has booked flat for the purpose of having a shelter over his head”

 

9.           There being delay in completing construction the OPs are prima facie negligent in the discharge of their duty. Infact their act amounts to indulging in unfair trade practice. But before we finally adjudicate on the subject we may examine the averments made in the written statement. Their first averment is that the complainant having booked more than one unit in the project launched by them has transacted for investment purpose in which case the complainant is not a consumer. This plea cannot be accepted. No cogent evidence has been placed before us in support of this averment except for this bald plea. It is a trite law that unless it is shown by bringing on record some cogent evidence that the purchaser is engaged in the purchase and sale of flat/ houses on regular basis with a view to make profit by sale of flats/houses, a mere purchase of more than one flat would not per se be sufficient to hold that the purchase was for commercial purpose. This view has been upheld by the Hon’ble NCDRC in the matter of Rajesh Malhotra and ors versus Arcon Developers Pvt. Ltd. and ors reported in II [2016] CPJ 125 (NC). Similar view was held by the Hon’ble NCDRC in Sai Everest Developers and Anr versus Harbans Singh Kohli and ors in FA-530/2015.
10. The next argument of the OP that the complainant having prayed for the refund is required to approach the Civil Court for the redressal of her grievances has no legs to stand since this Commission is adjudicating on the charge of deficiency of service on the part of the OP which subject is covered within the ambit and scope of Section 2(1)(g) and Section 2(1)(r) of the Consumer Protection Act 1986.
11. The next leg of the argument of the OPs is that the project being at Greater Noida, this Commission lacks the territorial jurisdiction. For this purpose we may advert to the provisions contained under Section 17 (2) of the Act. The said provision of the Act Posits as under:

 

1.  

A complaint shall be instituted in a State Commission within the limits of whose jurisdiction-

1. The opposite party or each of the opposite parties where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain or
2. Any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business or has a branch office or personally works for gain, provided that in such case either the permission of the State Commission is given or the opposite parties who do not reside or carry on business or have a branch office or personally works for gain, as the case may be, acquiesce in such institution, or
3. The cause of action, wholly or in part, arises.

 

12. The registered office of the company being at Delhi, this Commission, relying on the provision of 17(2)(a) of the Act, enjoys the territorial jurisdiction to hear and dispose of this complaint and accordingly the contention of the OP to this effect is also rejected.
13. Further we are not impressed with the argument of the OPs that the subject involving complicated question of law cannot be adjudicated by the Consumer Forum in summary procedure. This is a complaint seeking adjudication whether the OPs are deficient in service, which subject, in our view, is squarely covered within the ambit and scope of the provisions of the Consumer Protection Act 1986.
14. We are not impressed with the argument of the OP regarding worldwide recession having impact on the real estate in particular since this cannot, by any stretch of imagination be a condition or circumstances leading to the delay in completion of the construction in the project. It belies our conviction that a developer like Parsvnath having earned name through high quality of work, was unable to organise for completion of the project. Hence we have no hesitation in rejecting this defence.
15. Now we may examine the matter on merit of the case. Having bestowed our anxious consideration to the facts at hand, we are of the opinion, that the complaint deserves to be accepted. The afore-noted preliminary objections, raised by the OPs regarding maintainability of the complaint, in complete ignorance of the statutory provisions and the settled legal position, are stated to be outrightly rejected sequentially.
16. In that view of the matter the inevitable conclusion is that on merit there was gross deficiency as defined in Section 2(1) (g) of the Act, on the part of the OPs in its failure to deliver the possession of the flat to the complainant in terms of the agreement. It is trite law that where possession of the property is not delivered within the stipulated period, the delay so caused is not only deficiency in rendering of service, such deficiency or omission tantamount to unfair trade practice as defined in Section 2(r)(ii) of the Act, as well. [Lucknow Development Authority versus MK Gupta [(1994) 1 SCC243]
17. Having arrived at the said conclusion, the core question for consideration is as to how the complainants are to be compensated for the monetary loss, mental and physical harassment they have suffered at the hands of OPs on account of non-delivery of the allotted flat.
18. The provisions of the Act enable a consumer to claim and empower the Commission/Forum to redress any injustice done to a consumer. The Commission or the Forum is entitled to award not only value of goods or services but also to compensate a consumer for injustice suffered by him. The word compensation is of very wide connotation. it may constitute actual loss or expected loss and may extend the compensation for physical, mental or even emotional suffering, insult or injury or loss. Therefore for the purpose of determining the amount of compensation, the Commission/Forum must determine the extent of sufferance by the consumer due to action or inaction on the part of the OP. In Ghaziabad Development Authority v. Balbir Singh-MANU/SC/0282/2004: (2004) 5 SCC 65, while observing that the power and duty to award compensation does not mean that irrespective of facts of the case, compensation can be awarded in all matters on a uniform basis, the Hon’ble Supreme Court gave certain instances and indicated the factors, which could be kept in view while determining adequate compensation. One of the illustrations given in the said decision was between the cases, where possession of a booked/allotted property was directed to be delivered and the cases where only monies paid as sale consideration, are directed to be refunded. The Hon’ble Court observed, in this behalf, that in cases where possession is directed to be delivered to the Complainant, the compensation for harassment will necessarily have to be less because in a way that party is being compensated by increase in the value of the property he is getting. But in cases where monies are being simply refunded, then the party is suffering a loss inasmuch as he had deposited the money in the hope of getting a flat/plot. He is not only deprived of the flat/plot. He has been deprived of the benefit of escalation of the price of the flat/plot. Additionally, in our view, in such a situation, he also suffers substantial monetary loss on account of payment of interest on the loans raised, depreciation in the money value and escalation in the cost of construction etc.
19. Having noticed the broad principles, to be kept in view while determining the compensation, we may advert to the facts at hand. The complainant had deposited the amount as per schedule as agreed to but the OPs were found wanting in the discharge of their duties.
20. The NCDRC in one case, namely, Emaar MGF Land Pvt. Ltd. another versus Krishan Chander, RP 873/13, decided on 29.09.2014, is pleased to hold as under:

 

“The act of the builder in not handing over the possession of the plot even after collecting the total charges and executing the agreement amounts to deceptive practices, leading to unfair trade practices.”

 

21. The Hon’ble NCDRC in the matter of Merlin Projects Ltd. and Anr versus Pandav Roy and another, FA-128/09, decided on 23.05.2014, is pleased to hold as under:

 

“Appellant to pay to the respondent a sum of Rs. 50 lakh for non-delivery of the possession of the immovable property.”

 

22. The Hon’ble Apex Court in the matter of DDA versus Krishan Lal Nondrayog as reported in IV [2010] CPJ 7 (SC) is pleased to hold as under:

“NCDRC directed the appellant to pay interest @ 18% on account of delay caused in delivery….. The Hon’ble Apex Court affirmed the order but reduced the rate of interest @ 5%, observing that award of interest @ 15% is not interest in substance but it is to compensate the respondents by way of damages for loss in terms of money, mental agony and harassment caused…..

 

23. In yet another case, in the case of HUDA versus Sushila Devi Sharma reported in IV[2011] CPJ 3 (SC) the Hon’ble Apex Court ruled that orders of NCDRC holding that the HUDA not having offered the possession have been deficient, does not call  for any interference and the SLP was dismissed.
24. The Hon’ble NCDRC was pleased to award compensation with interest due to not delivery of possession in the matter of Pushpa Builders Ltd. versus S.K. Singhal as reported in – IV[2012] CPJ 204 (NC) observing that there was failure on the part of the builder in non delivery of the flat within the stipulated time and directing the builder to refund the amount with interest reduced from 12% to 6% and award Rs. 50,000/- as compensation for mental agony.
25. In view of the discussion done, and on consideration of the facts and circumstances, we direct the OPs to refund the principal amount paid by the complainant, delivery of the possession of the flat since not done within the agreed time, nor a possibility in the near future with simple interest @ 8% p.a. from the date of receipt of the amount till its realisation and compensation of Rs. 50,000/- for mental agony. These directions may be carried out within a period of two months from the date of receipt of the certified copy of this order.
26. Ordered accordingly. A copy of this order be forwarded to the parties to the case free of cost as statutorily required. File be consigned to record.  

 

 

(ANIL SRIVASTAVA)(O.P.GUPTA)

       MEMBER (GENERAL)                                                                           MEMBER (JUDICIAL)

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