JUSTICE AJIT BHARIHOKE, PRESIDING MEMBER

            Ms. Anjana Kocchar and Rajeev Kocchar attracted by the project “FRESCO” launched by opposite party no.1 in the year 2006 applied for apartment in the said project located in Sector 50, Nirvana Country, Gurgaon.  They were allotted apartment no. 401 in Block 17 of the complex having super area 1988 sq. ft. approximately against consideration of ₹ 79,86,569/-.  A Buyer’s Agreement was executed on 12.03.2007 and as per the Buyer’s Agreement, the possession of the apartment was to be delivered to the them within 36 months i.e. around 12.03.2010.  Ms. Anjana Kocchar and Rajeev Kocchar regularly paid the instalments against the consideration amount as per the agreed payment schedule.  Despite that opposite party failed to deliver possession of the apartment and extended the delivery time to October 2010.

2.         That on 29.06.2010 Ms. Anjana Kocchar and Rajeev Kocchar sold their rights in the above allotted apartment to the complainants on payment of agreed consideration. The transfer of rights and the allotment with the knowledge of the opposite party developer, was transferred in favour of the complainants.  The complainants vide communication dated 09.07.2010 were informed by opposite party no.1 that they would be required to pay a sum of ₹ 3,78, 864 plus CMRC ₹27,500/- plus SDC and other applicable charges at the time of final offer of possession.

3.         It is the case of the complainants that although as per the Builder-Buyer’s Agreement, the possession was to be delivered in the year 2010,  the opposite parties have failed to deliver possession of the apartment till the filing of the complaint in May 2014 despite of the fact that opposite parties have received 95% of the agreed consideration amount.  Claiming this to be deficiency in service, the complainants have raised a consumer dispute seeking following reliefs:

“In view of the above, it is therefore most respectfully prayed that this Hon’ble Commission may kindly be pleased to : reliefs:

1. Direct the O.P. to handover the possession of the aforesaid apartment complete in all respects to the complainant immediately as per the buyers agreement and execute all the necessary and required documents in respect of the said apartment in favour of the complainant which is of identical size and in similar locality or in alternative pay a sum of ₹2,00,00,000/- (two crore only) to enable the complainant to purchase another house on his own.
2. Direct the O.P. to pay a sum of ₹33,000/- (rupees thirty three thousand only) per month to the complainant towards rental expenses from 1.11.2012 till the possession of the house, till April, 2014 being ₹33,000/- for 18 months amounting to ₹5,94,000/- (five lakhs ninty four thousand only) alongwith previous rental @ ₹25,000/- (twenty five thousand per month) from November, 2010 till January, 2011 amounting to ₹75,000/- (seventy five thousand only) from February 2011 till November, 2011, amounting to ₹2,65,000/- (two lakh sixty five thousand only), ₹28,250/- from December, 2011 till October, 2012 amounting to ₹3,10,750/- (₹ Three lakhs ten thousand seven hundred and fifty only) and the total amounting to ₹12,44,750/- (₹Twelve lakhs forty four thousand seven hundred and fifty only).
3. Direct the OP to pay compensation as for the delay in handing over the possession as per the apartment allotment agreement. (which is calculated @ ₹5 Per sq. feet (ie 1877 sq. fts for each month. Delay till date being of 51 months, hence amounting to ₹4,50,480/- (rupees four lakh fifty thousand four hundred and eighty only).
4. Direct to the OP to pay a sum of ₹25,00,000/- (rupees twenty five lakh only) towards damages for the physical and mental torture, agony, discomfort and undue hardships caused to the complainant and the complainant’s family as a result of the above acts of omissions on the part of the OP.
5. Direct the OP to pay a sum of ₹1,25,000/- (rupees one lakh twenty thousand only) to the complainant towards the cost of litigation.”

4.         The opposite parties in their joint written statement have admitted having allotted subject flat initially in favour of Ms. Anjana Kocchar and Rajeev Kocchar.  It is also admitted that original allottees had paid a sum of ₹ 79,86,569/- against the consideration amount as per the schedule of payment and the balance payment is required to be made at the time of delivery.  The opposite parties have further admitted that booking rights of original allottees have been purchased by the complainants in June 2010 and the allotment has been transferred in their favour.  It is admitted that delivery of possession of the apartment to the allottees has been delayed.  According to the opposite parties, the construction could not be completed and the possession of the apartment could not be delivered to the complainants despite of expiry of scheduled date of delivery on account of the reasons not within the control of the opposite parties.  The opposite parties have tried to justify the delay on account of Force Majeure clause in the agreement.  It is pleaded that delay in completing of construction has occurred because of following circumstances beyond the control of the opposite party.

a.         Recession in economy resulting in scarcity of availability of labour and raw material;

b.         Commonwealth Games organised in October 2010 resulting in extreme shortage of labour in NCR region;

c.         Short of labour due to implementation of social schemes like National Rural Employment Guarantee Act (NREGA) and Jawaharlal Nehru Urban Renewal Mission (JNNURM);

d.         Extreme shortage of water in NCR region which was further accentuated due to orders of Punjab and Haryana High Court stopping the use of ground water for construction activities;

e.         Shortage of bricks due to restrictions imposed by Ministry of Environment and Forest on brick kilns;

f.          Shortage of sand due to suspension of mining activity in Aravali Hill Range.

5.         The opposite parties also claimed in the reply that in view of clause 4. c. (ii) of the Buyer’s Agreement, if at all there is a liability of  the opposite parties to pay compensation, it is only to the extent of ₹5/- per sq. ft. per month for delay in offering possession.  It is also pleaded that since the agreed cost of apartments in question was less than rupees one crore, the complaints could be maintained only before the State Commission and not before the National Commission whose jurisdiction starts where the value of dispute is more than rupees one crore.

6.         The parties have filed affidavit evidence in support of their stand.  Although the opposite parties have admitted that the project has been delayed considerably, yet in the affidavit evidence, opposite parties have taken vague stand that the construction work of the project is at advanced stage and the possession is likely to be offered in first quarter of the year 2016 subject to barring circumstances.  Thus, it is clear that tentative date of offer of possession given in the affidavit is also not firm.

7.         We have heard learned counsel for the parties and perused the record.  It is  not disputed that as per the original buyer’s agreement, the possession was supposed to be delivered by the opposite party within 36 months of the date of said agreement i.e. somewhere in March 2010.  Admittedly, date of delivery of possession was extended by the opposite party unilaterally till 31.10.2010. Even the aforesaid deadline was not met by the opposite party.  We are now in the year 2016 but till date possession has not been delivered to the complainants.    Thus, unwarranted delay in completing the project and delivering the possession to the complainants is established on record.

8.         Now, the question arises whether the opposite parties have committed deficiency in service and, if so, what should be the relief to be granted to the complainants.

9.         Learned counsel for the opposite parties has contended that as per the agreement between the parties, the delivery of possession of apartment by March 2010 was subject to force majeure circumstances. In the instant case, because of various circumstances detailed in written statement which were beyond the control of the opposite party, the delay has been caused and as such the opposite party cannot be said to be deficient in service.  In the alternative, it is argued that even if it is held that delay is not justified, then also the computation of compensation to be paid to the complainant has to be subject to the agreement between the parties which stipulates that in the event of delay in delivery of possession, the opposite party shall pay compensation to the extent of ₹5/- per sq. ft. per month for the delay in offering the possession.

10.       Similar question of law and facts came up before this Commission in Consumer Case No. 277 of 2013 titled Suman Nandi & Anr. Vs. M/s Unitech Ltd.& Anr. and other connected cases decided on 17.12.2015.  In the said case, this Commission decided the issue in favour of the complainants with following observations;

On careful perusal of the evidence, we find that opposite parties have not led any evidence to show any new legislation, regulation or order suspending, stopping or delaying the construction of complex in which the subject apartments were agreed to be sold to the complainants.  Neither there is an allegation of strike, slow-down, civil commotion, war, enemy action, terrorist action etc. or any other act of god which might have caused delay in completion of project within time stipulated in the Buyer’s Agreement nor evidence in this regard has been adduced.   Learned counsel for the opposite parties have tried to get out of the situation by arguing that expression slow-down in clause 9.b. of the Buyer’s Agreement would also include economic slowdown or recession in real estate sector.  We do not find merit in this contention. The economic constraints ordinarily cannot be taken as a defence for non- compliance of the contract.  The term ‘slow – down’ in clause 9.b. has been used alongwith word ‘strike’ and it has to be read ejusdem generis with the aforesaid words and can only mean a slow down resorted by the labourers engaged in the construction of the project in support of their demands. 

Äs regards shortage of labour, but for the bald plea of the opposite parties in their written statement and the affidavits which are more or less reproduction of the written statement, there is no material or convincing evidence on record that despite of making efforts, the opposite parties could not get labours to complete the construction of project within the stipulated time.  Therefore, it cannot be accepted that opposite party because of market conditions could not manage to arrange adequate labour for timely completion of project.  As regards the alleged shortage of water, bricks and sand in the market, no cogent evidence has been produced by the opposite party to establish that it was unable to procure water, sand and bricks in adequate quantity.  No evidence has been adduced to establish that from the date of signing of Buyer’s Agreement from 2006-2010, there was shortage of those materials in the market.  The opposite parties have also taken a plea that there was a notification of government imposing restriction on the production of bricks by brick klins.  The aforesaid argument is without any force because the notification relied upon by the opposite party was in force even at the time the opposite party promised possession of the apartments within 30 -36 months.  The opposite parties having entered into an agreement knowing the aforesaid constraints because of government notification now cannot get rid of its obligation to justify the delay in construction.  As regards the scarcity of water, plea of the opposite party is without any basis because the order of High Court stopping use of ground water for construction activity came much later.  If the opposite parties actually intended to complete the construction  within the stipulated time, they would have completed the super structure which does not take much time within initial 24 months of the date of Buyer’s Agreement.

As regards the plea of shortage of labour etc. due to common wealth game is concerned, that plea is also not acceptable for the reason that Buyer’s Agreement are of the year 2006 to 2010 and if the opposite parties intended to comply with the terms of agreement, they would have raised substantial construction before common wealth games. Had there been truth in the defence taken by the opposite party, the opposite party after the completion of construction activities pertaining to commonwealth games would have completed the project within the period of five years since the common wealth  games were held.  Till  date, the possession of the apartments have not been handed over to the complainants which clearly indicate the deliberate delay and negligence on the part of the opposite party and opposite party cannot be permitted to hide behind a bogus plea of force majeure or exceptions provided in clause 9.b of the Buyer’s Agreement.

In view of the discussion above, it is evident that despite of having promised to deliver possession of the respective apartments to the complainants within 30-36 months from the date of execution of Buyer’s Agreement and despite of having received more than 90% of the consideration amount, the opposite party has failed to fulfil their part of promise i.e. to deliver possession of apartments to the respective complainants. This conduct of the opposite party in our view amounts to deficiency in service.  Thus, the complainants are entitled to a direction for delivery of possession of respective apartments to them by a stipulated time and also to pay compensation for the delay.

Learned counsel for the opposite party has contended that as per clause 4. a. of the Buyer’s Agreement the opposite party in the event of delay in delivery of possession is liable to pay compensation for delay @ Rs.5/- per sq. ft. of the super area per month. It is argued that this contract was voluntarily signed by the complainant. Therefore, if the complainants are entitled to compensation, it cannot be more than as stipulated above. In support of his contention learned counsel has referred to the judgments in Bharti Knitting Company vs. DHL Worldwide Express Courier Division of Airfreight Ltd. JT 1996 (6) SC 254, Secretary Bhubaneswar Development Authority vs. Susanta Kumar Mishra [V (2009) SLT, 242] and PUDA vs. Mrs. Shabnam Virk II (2006) CPJ 1 (SC).

Learned counsel for the complainants on the contrary has contended that the above-noted term relied upon by the opposite parties is most unfair because in the same contract in the event of any default in payment on the part of the complainant, they are required to pay 18% interest at the defaulted amount compounded on quarterly basis. It is contended that therefore in all fairness the complainants should be awarded 18% interest p.a. on the consideration amount paid by them for the period of delay till the delivery of possession.

“We have considered the above arguments and gone through the judgments referred to by the counsel for the opposite parties. It cannot be disputed that ordinarily the parties are bound by the terms and conditions voluntarily agreed by them and the Courts are supposed to implement the contract in letter and spirit and they cannot add or subtract from the contract. The Supreme Court, however, in the matter of Bharathi Knitting Company Vs. DHL Worldwide Express JT 1996 (6) SC 254  has observed thus:

“It is seen that when a person signs a document which contains certain contractual terms, as rightly pointed out by Mr. R.F. Nariman, learned senior counsel, that normally parties are bound by such contract; it is for the party to establish exception in a suit.  When a party to the contract disputes the binding nature of the signed document, it is for him to prove the terms in the contract or circumstances in which he came to sign the documents need to be established.  It is true, as contended by Mr. M.N. Krishnamani, that in an appropriate case the Tribunal without trenching upon acute disputed question of facts may decide the validity of the terms of the contract based upon the fact situation and may grant remedy.  But each case depends upon its own facts”.

On reading of the above, it is clear that depending upon the facts of the case in exceptional matters,  the tribunal may decide validity of the terms and conditions agreed to by the parties and grant remedy.

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.

Looking from a different angle, given the facts of this case the conduct of the opposite party. Section 2 (r) of the Consumer Protection Act, 1986 defines unfair trade practice as under: -

      "Unfair trade practice" means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely;—

(1)  the practice of making any statement, whether orally or in writing or by visible representation which,—

(i)  falsely represents that the goods are of a particular standard, quality, quantity, grade, composition, style or model;

(ii) falsely represents that the services are of a particular standard, quality or grade;

(iii)       falsely represents any re-built, second-hand, reno­vated, reconditioned or old goods as new goods;

(iv)       represents that the goods or services have sponsor­ship, approval, performance, characteristics, accesso­ries, uses or benefits which such goods or services do not have;

(v) represents that the seller or the supplier has a spon­sorship or approval or affiliation which such seller or supplier does not have;

(vi)       makes a false or misleading representation concern­ing the need for, or the usefulness of, any goods or services;

(vii)      gives to the public any warranty or guarantee of the performance, efficacy or length of life of a product or of any goods that is not based on an adequate or proper test thereof;

      Provided that where a defence is raised to the effect that such warranty or guarantee is based on adequate or proper test, the burden of proof of such defence shall lie on the person raising such defence;

(viii)makes to the public a representation in a form that purports to be—

(i)   a warranty or guarantee of a product or of any goods or services; or

(ii)  a promise to replace, maintain or repair an article or any part thereof or to repeat or continue a service until it has achieved a specified result, if such purported warranty or guarantee or prom­ise is materially misleading or if there is no reasonable prospect that such warranty, guaran­tee or promise will be carried out;

(ix) materially misleads the public concerning the price at which a product or like products or goods or services, have been or are, ordinarily sold or provided, and, for this purpose, a representation as to price shall be deemed to refer to the price at which the product or goods or services has or have been sold by sellers or provided by suppliers generally in the relevant market unless it is clearly specified to be the price at which the product has been sold or services have been provided by the person by whom or on whose behalf the representation is made;

(x)  gives false or misleading facts disparaging the goods, services or trade of another person.

Explanation. - For the purposes of clause (1), a statement that is— 

(a) expressed on an article offered or displayed for sale, or on its wrapper or container; or

(b)    expressed on anything attached to, inserted in, or accompanying, an article offered or displayed for sale, or on anything on which the article is mounted for display or sale; or

(c)     contained in or on anything that is sold, sent, delivered, transmit­ted or in any other manner whatsoever made available to a member of the public,  

shall be deemed to be a statement made to the public by, and only by, the person who had caused the statement to be so expressed, made or contained;”

On reading of clause 2 (r) (i) (ii) & (vi), it is clear that if a service provider in order to increase his business makes a false representation regarding the standard and quality of the proposed service or its usefulness, it would amount to the unfair trade practice. On careful reading of the Buyer’s Agreement it is clear that in the said agreement, the opposite party service provider has extended a clear promise/representation to the complainants that in the event of their paying consideration amount, they would be given possession of the booked apartments complete in all respect within 30-36 months or reasonable period thereof. However, in the above-noted case, the stipulated period has expired way back and even almost five years have gone by but the possession of the apartments have not been delivered. There is no evidence from the side of the opposite party as to how and where the money paid by the complainants and the other buyers of apartments in the project has been utilised.  From this can be safely inferred that the opposite party has diverted the funds and instead of utilising the funds paid by the complainants/buyers for completing the project within the promised period. Therefore, in our  considered view, this is a case of soliciting business by the opposite party service provider by making false representation.  Therefore, in our view,  this is a clear case of unfair trade practice.   The opposite party, thus,  cannot take shelter of clause 4.a of the contract to avoid its liability to pay reasonable compensation for the delay caused due to its intentional act in not making sincere efforts to complete the construction within a reasonable period.

In view of the above, since the opposite party has utilised the money paid by the complainants against consideration amount, the complainants are entitled to interest on the payment made by them for the period of delay as compensation instead of meagre compensation computed on the basis of clause 4.c. of the Buyer’s Agreement, which is highly unfair.  Looking into overall facts and circumstances of the case, we are of the opinion that 12% interest p.a. from the date of default in delivery of the subject apartments would meet the interest of justice.”

11.       Similar view has been taken by the Coordinate Bench of this Commission in CC No. 487 of 2014 Manoj Kumar Jha & Anr.  Vs. M/s Unitech Ltd. and other connected cases decided on 18.01.2016.  In the said case, which also relate to the same project “FRESCO”,  the Coordinate Bench rejected the plea of the Force Majeure and decided the complaints in favour of the complainants.  We do not find any reason to differ with the view earlier taken by the Benches of this Commission.

12.       In view of the above, we conclude that opposite party  has failed to establish that it was prevented from delivering the possession of the apartment to the complainants within the stipulated time and opposite parties by failing to deliver possession of subject apartment to the complainants almost six years after the expiry of stipulated period of delivery of possession, have committed deficiency in service. Thus, the opposite parties are under obligation to deliver the possession of the apartment to the complainants within a reasonable period and also to pay compensation to the complainants in the form of reasonable interest on the amount which the opposite parties received against the consideration amount and utilized the same.

13.       Thus, taking into overall facts and circumstances of the case and that the complainants are subsequent purchasers, who purchased the right of the original allottees vide agreement dated 29.06.2010, we allow the consumer complaint and direct as under:

a.         Opposite Party shall deliver possession of the subject apartment to the complainants within six months from the date of pronouncement of this order;

b.         The Opposite Party shall pay to the complainants compensation @ 12% p.a. w.e.f. one year from the date on which the complainants purchased the rights of previous allottees till the possession of apartment is delivered to them.  The interest till 31.05.2016 on the amount received by the opposite party shall be paid to the complainants within one month from the date of this order.  Thereafter, compensation in the form of interest in terms of this order shall be paid on monthly basis to the complainants by 10^th of each succeeding month.

c.         If the opposite party fails to pay compensation or deliver possession of the apartment within the stipulated period, the complainants shall be at liberty to initiate proceedings for execution of the order.

d.         The opposite party shall pay ₹10,000/- to the complainants as cost for litigation.

14.       Complaint is disposed of accordingly.