Delhi

StateCommission

CC/13/208

DR. PARDIP KUMAR KESHRI - Complainant(s)

Versus

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

17 Nov 2018

ORDER

IN THE STATE COMMISSION : DELHI

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

 

Date of Decision:17.11.2018

 

 

Complaint Case No.208/2013

 

 

1.       Dr. Pradip Kumar Keshri,

S/o  Late Sh. Mohan Lal Keshri,

 

2.       Mrs. Madhu Keshri,

W/o Dr. Pradip Kumar Keshri,

 

Correspondence Address:

Qr. No. 13, Telegraph Place

Opp. Kalavati Saran Hospital

Gole Market, New Delhi-110001                                …. Complainants

 

Versus

 

1.       Parsvnath Developers Limited,

6^th Floor, Arunachal Building,

19, Barakhamba Road,

New Delhi-110 001.

Through its Managing Director

 

2.       The Executive Chairman,

Parsvnath Developers Limited,

6^th Floor, Arunachal Building,

19, Barakhamba Road,

New Delhi-110 001.

 

3.       Devidayal Aluminum Industries Private Limited,

          40-B1/16, Site IV,

          Industrial Area Sahibabad,

          Ghaziabad, Uttar Pradesh

          Through its Managing Director

… Opposite Parties

CORAM

Justice Veena Birbal, President

Ms. Salma Noor, Member

 

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

   

2. To be referred to the reporter or not?

 

 

Justice Veena Birbal, President

 

 

1. A complainant under Section 17 of the Consumer Protection Act, 1986 (in short, the “Act”) is filed by the complainants Mr. Pradip Kumar Keshri and Mrs. Madhu Keshri wherein it is stated that to fulfil the requirement of residential accommodation, they had had agreed to purchase Flat No. 803 in Tower No.3 of complex Parsvnath Regalia, Sahibabad, Ghaziabad, U.P. measuring 1570 sq. ft. alongwith a covered car parking, and entered into a Flat Buyer Agreement dated 14.05.2007 (in short, the ‘Agreement’) with OP No.1, which was duly stamped and signed by the OP No.3 in confirmation.  The total sale consideration of the said Flat as per the Agreement was Rs.40,00,000/-.  The payment plan opted was construction linked.  It is stated that 71% of total sale consideration i.e. Rs.28,69,000/- had been paid by the complainants to OP No.1 and balance was to be paid as per the demands to be made by the OP No.1. Besides the aforesaid amount, the complainants were also required to pay one time interest free maintenance deposit at the time of final payment.  At the time of booking, it was assured by the representatives of OP No.1 that possession of the unit in question would be handed over to them within 3 years from the commencement of construction of the project.  It is stated that for payment of sale consideration to OP No.1, the complainants had taken housing loan of Rs.20,00,000/- and for repayment of which the complainant are paying interest ranging from 10% to 14% per annum.
2. As per clause 10(a) of the Agreement, the flat was to be completed within a period of 30 months with a grace period of 06 months from the commencement of the tower wherein flat was located.  It is further alleged that the possession was to be handed over by July-August 2009.  However, it was not offered.  Rather OP No.1 unilaterally rescheduled the completion of project and extended the project completion date to December 2010. It is further stated that OP No.1 did not complete the construction within the stipulated period.  The matter was followed up with the OPs and every time OPs assured that possession will be handed over soon.  It is stated that all the payments against the demands of OP No.1 have been made by the complainant and balance 29% of the total sale consideration was payable against the demand of OP No.1 at the time of offer of possession.  Despite that construction is not completed. The complainants have also sent legal notice dated 25.10.2012 for completion of the project and for handing over the possession.  It is stated that OPs have indulged in unfair trade practice after mobilising the funds.  The complainants have prayed for grant of interest @ 24% per annum on the amount deposited with OPs from the agreed date of possession till the date the possession of the flat is offered by OP-1.  The complainants have also sought direction to the OPs for payment of an amount equivalent to the benefit of exemption of tax that complainants would have availed under the relevant provision of Income Tax Act on an amount of Rs.10,34,913/- paid by them as interest on servicing of home loan had the possession of the flat being offered to them within the time without any delay.  The complainants are also seeking direction to the OP for completion of project and offering letter of possession.  The complainants have further prayed compensation of Rs.5 lacs towards mental harassment and agony caused to them along with cost of litigation.  
3. The complaint is opposed by OPs by filing written statement. However, OPs have admitted that the flat in question was booked by the complainants.  OPs have also admitted the execution of Agreement in favour of complainants. The payments made by complainants are also admitted.  It is stated that on account of global recession which had hit the economy all over the world, the pace of construction was slowed down.  It is further stated that as per clause 10 (c) of the Agreement, the rights of the complainants are well protected as OP No.1 has agreed to give compensation @ Rs.5/- per sq. ft. of the super area of the flat per month for the period of delay.  OPs have denied deficiency in service and unfair trade practice on their part.  It is denied that OPs are liable to pay interest, compensation etc. as is claimed by the complainants.  A prayer is made for dismissal of complaint.
4. Rejoinder is filed denying the averments made by the OP against the complainants and contents of complaint are reiterated.
5. Both the parties filed evidence in the form of affidavits and also filed written arguments.
6. At the outset, it may be mentioned that during the course of arguments, it is stated by both the parties that physical possession of the flat in question has been handed over to the complainants on 23.09.2018 by the OPs.  It is also stated that the offer of possession was given to the complainants on 29.11.2017.  Complainants have given a chart giving aforesaid details as well as other material dates. During arguments Ld. counsel for OP admits the chart of complainant and necessary details given therein.
7. It is also not disputed by the OPs that the construction of the tower in which flat of complainants is located had commenced in the month of March, 2007 and as per the Agreement, the same was supposed to be completed by March, 2010 as is stated by OPs in reply dated 26.11.2012 to the legal notice of the complainants.  The only dispute is about rate and period of compensation for delay in delivering of possession.
8. Ld. Counsel for complainants has contended that there is a substantial delay of over 07 years in handing over the possession of the unit in question.  It is stated that the complainants deserve to be compensated.  It is submitted that complainants have suffered a lot at the hands of OPs.  It is submitted that the Agreement is providing unfair terms in respect of compensation.  Ld. Counsel for complainants submits that complainants have been deprived of the use of flat on account of default by OPs which has caused serious injury to them as such the complainants be given suitable compensation. It is submitted that OPs have failed to explain the delay in completion of project and have rather mis-utilized the funds of complainants. Ld. Counsel prays for grant of suitable compensation. 
9. On the other hand, Counsel for OPs has submitted that the complainants are entitled for compensation as per clause 10(c) of the Agreement which is reproduced as under:

 

“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 to the Buyer compensation @ Rs. 53.80 (Rupees Fifty Three and Paise Eighty only) per sq. meter or @ Rs. 5/- per sq. ft. of the super area of the Flat per month for the period of delay.  Likewise, if the Buyer fails to settle the final account and to take possession of the Flat within 30 days from the date of issue of the final call notice/offer to hand over possession by the Developer, the Buyer shall be liable to pay to the Developer holding charges @ Rs. 53.80 per sq. meter or @ Rs. 5/- per sq. ft. of the super area of the Flat per month on expiry of 30 day notice.”

 

 

10. OPs have not been able to show that there were justified reasons for delay in handing over the possession.  The global recession having hit the economy, as is alleged, is no ground to explain the delay.  It is not the stand of OP that due to Force Majeure construction got delayed.  There is a substantial delay in offering the possession by the OPs.  The complainant deserves to be compensated.  The National Commission in Shri Suman Nandi & Anr. v. M/s. Unitech Limited & Anr., Complaint No.277 of 2013, decided on 17.12.2015, has held as under:

 

“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.”

 

11. The National Commission in Captain Gurtaj Singh Sahni & Anr. v. Manager, Unitech Limited & Anr., CC-603/2014 decided on 02.05.2016, has held that if the compensation for 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 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.
12. In Jivitesh Nayal & Anr. v. M/s. Emaar MGF Land Limited & Anr., IV (2017) CPJ 493 (NC), CC No.34/2015 & other connected matters decided on 02.11.2017 by the National Commission, it has been held as under:

 

“If a paltry compensation of say Rs.10/- per sq.ft. per month is awarded against a builder, it may lead to dangerous consequences since the builder may be tempted not to complete the construction and divert the money collected from the flat buyers for other purposes, in the hope that in the event of the buyer approaching a Court or a Consumer Forum, he can get away by paying a paltry compensation of Rs.10/- per sq. ft. per month to him.  Paying such a meagre compensation would always be a win win situation for a builder who is likely to pay many times more if he goes to market for arranging finances which he gets by diverting the money collected from the flat buyers to other purposes.  This Commission, therefore, ought to refrain from taking a view which would lead to such serious consequences, against the innocent flat buyers.  I also find some merit in the contention of the complainants that in a situation where the builder despite taking money from the flat buyers does not utilize the whole of the said money only for the construction of the flat sold to him, the amount which the builder has collected from the flat buyers should be treated as a cash deposit with the builder who should pay adequate interest to the flat buyer for utilizing his money.”

 

13. As discussed above, OPs have not been able to show any justified reasons for delay in completion of project.  There is delay of over 07 years in offering the possession.  In the facts and circumstances of the case, the complaint stands disposed of with the direction to the OPs to pay compensation in the form of simple interest @ 8% per annum on the amount deposited by the complainants w.e.f. December, 2010 till date on which the possession was offered i.e. 29^th November 2017. 
14. The compensation which has already been paid @ Rs.5/- per sq. ft. shall be adjusted by the OPs.  OPs shall also pay a sum of Rs.50,000/- as cost of litigation to the complainants.    
15. Complaint stands disposed of accordingly.
16. A copy of this order as per the statutory requirement be sent to the parties free of charge. Thereafter the file be consigned to Record Room.

 

 

 

(Justice Veena Birbal)

President

 

 

 

(Salma Noor)

Member