STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

1. Pawan Kumar Goel, s/o Sh.K.L.Goel

2. Anju Goel, w/o Sh.Pawan Kumar Goel, both residents of House No.410, Sector 4, Panchkula, Haryana.

……Complainants

V e r s u s

1. UPPAL,S MARBLE ARCH, Pocket 2 & 3, Manimajra, U.T., Chandigarh.

2. UPPAL HOUSING PVT. LIMITED, 5th Floor, South Tower, NBCC Place, Pragati Vihar, Lodhi Road, New Delhi-110003

 ...Opposite Parties

Complaint under Section 12 of the Consumer Protection Act, 1986.

BEFORE:   MR. JUSTICE SHAM SUNDER, PRESIDENT.

                MRS. NEENA SANDHU, MEMBER.

Argued by: Sh.Jatin Kumar, Advocate for the complainants.

               Sh.Raj Karan, Advocate for the OPs.

PER  JUSTICE SHAM SUNDER, PRESIDENT          

1.              The facts,  in  brief, are that the complainants jointly applied for the allotment of a residential apartment, vide application dated 17.11.2006, in the project, launched by the OPs, namely Uppal`s Marble ARCH, Pockets 2 & 3, Manimajra, U.T., Chandigarh,  and deposited an amount of Rs.16,92,750/-, alongwith the application form. The OPs issued allotment letter dated 23.11.2006, allotting a residential apartment, to the complainants. The parties entered into ‘Apartment Buyer`s Agreement’ dated 26.12.2006, in respect of the sale of residential apartment bearing No.C-03, Ground Floor. According to Clause No.8.1 of the terms and conditions, contained, in the aforesaid agreement, it was confirmed by the OPs, that the possession of the said apartment, shall be handed over to the allottees, on or before 30 months, from the date of start of construction of the residential complex. It was further stated that the construction had already started, at the time of execution of the aforesaid agreement. It was further stated that, from time to time, the OPs had made assurances, that the possession of the apartment shall be delivered, as per the agreement. They requested the complainants, to deposit the remaining amount, as and when, fell due. It was further stated that the complainants, performed their part of the contract i.e. made the payment of Rs.1,42,25,700/- as per schedule. It was further stated that the possession of the residential apartment was not handed over to the complainants, within time. It was further stated that there was a delay of 13 months, in handing over the actual physical possession of the residential apartment, to the complainants,  from the date committed, as per the terms and conditions, contained in the agreement. It was further stated that  by not handing over the possession, in time, the OPs, were deficient, in rendering service, as also, indulged into unfair trade practice. The OPs were asked to pay interest @24% p.a., which they would have charged, in case of default in making payment, by the complainants, for the period of delay, as also, compensation to the tune of Rs.1 lac, on account of physical harassment and mental agony, but to no avail.  When the grievance of the complainants, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed.

2.              The OPs, put in appearance, and filed written reply, wherein, the factual matrix of the case was admitted. It was admitted that the complainants, applied for the allotment of a residential apartment, with the OPs and deposited a sum of Rs.16,92,750/- with them , alongwith the application. It was also admitted, that the agreement dated 26.12.2006, (Annexure C-1) was executed between the parties. It was also admitted that allotment letter dated 23.11.2006, was issued, in favour of the complainants, in respect of the apartment, mentioned in the complaint. It was also admitted that, as per the terms and conditions contained, in the agreement, the physical possession was to be delivered within 30 months, from the date of start of construction. It was stated that the delay occurred, on account of the circumstances, beyond the control of the OPs and, as such, as per Clause 8.1 of the agreement, referred to above, they were entitled to extension of time, for the delivery of physical possession of apartment. It was further stated that, though, the physical possession was delivered, after the delay of 13 months, from the date committed for delivery of the same, yet, it was on account of the circumstances beyond the control of the OPs. It was further stated that neither there was any deficiency, in rendering service, on the part of the OPs, nor they indulged into unfair trade practice.

3.              The complainants, in support of their case, led evidence, by way of their affidavits.

4.              The OPs, in support of their case, led evidence, by way of affidavit of Mr.Ajay Mangal, their Authorized Representative.

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

6.              The Counsel for the complainants, submitted that by not handing over the physical possession of the apartment, in time, as per Annexure R-2, nomenclatured as  ‘Uppal Housing Newsletter’, which was issued by the OPs, and as per Clause 8.1 of the ‘Apartment Buyer`s Agreement’ (Annexure C-1), the OPs breached the terms and conditions of the contract. He further submitted that the complainants, deposited the entire amount towards the price of the apartment, which was their hard earned money, and the same was utilized by the OPs, for a long time, without handing over the physical possession of apartment, to them, in time. He further submitted that the OPs were required, to take all the permissions, before launching the project, but they failed to do so, and falsely represented to the general public, vide Newsletter of September, 2006, that the possession shall be delivered by the end of 2008. He further submitted that, no doubt, the physical possession of apartment, was handed over to the complainants, after the delay of 13 months, from the date, committed for delivery of the same. He further submitted that, since the physical possession of apartment was not delivered, as per the terms and conditions of the agreement, referred to above, the OPs were deficient, in rendering service, as also, indulged into unfair trade practice, by giving misleading information. He further submitted that the complainants are, therefore, entitled to interest @24% p.a. on the amount, deposited with the OPs, from the date fixed for delivery of possession, till the actual date of handing over the physical possession of apartment, as also, compensation.

7.              On the other hand, the Counsel for the OPs, submitted that the Newsletter (Annexure R-2), did not form part of the contract, and, therefore, no reliance could be placed thereon. He further submitted that according to Clause 8.1 of the agreement (Annexure C-1), if the physical possession could not be delivered, on account of the circumstances, beyond the control of the OPs, by the date fixed, as per the terms of the agreement, the OPs were entitled to a reasonable extension of time, for delivery of physical possession of the residential apartment to the complainants/buyers. He further submitted that the Completion/Occupation Certificate (Annexure R-4), was issued by the Chief Administrator, U.T., Chandigarh, vide letter dated 31.05.2010. He further submitted that since, there was delay in issuing the Completion/Occupation certificate, by the Chief Administrator, U.T., Chandigarh, though the OPs applied for the same, in time, the latter could not be blamed. He further submitted that there was no deficiency, in rendering service, or indulgence into unfair trade practice, on the part of the OPs. He further submitted that since the physical possession of apartment, has already been delivered, to the complainants, as such, they are not entitled to interest, at any rate, on the amount, deposited by them, until the physical possession was delivered, and also the compensation.

8.              Annexure R-2, is the Newsletter, issued by the OPs in September, 2006. Vide this Newsletter, the general public and the prospective buyers, were intimated, by making representation, that the plans for Marble Arch, had been sanctioned vide letter number 1078/T3 dated 7th September, 2006; Bhoomi Pujan took place on 23.09.2006; and the construction will commence soon. It was also represented, vide this Newsletter, by the OPs, that within 3 months, the sample flat at Marble Arch, will be ready to feast the eyes of the prospective vendees. It was also intimated, vide this Newsletter, that the possession of apartments, shall be delivered, by the end of 2008. When the ‘Apartment Buyer`s Agreement’ (Annexure C-1), was executed, between the parties, the OPs, in clause 8.1 mentioned that they would offer possession, on or before 30 months, from the date of start of construction of  the residential complex, except, in case of certain unforeseen circumstances, or force majeure. As stated above, as per Clause 8.1, the date of completion of the project was around 31.03.2009. The OPs, however, did not stick to the date, mentioned in the Newsletter R-2, issued by them and the terms and conditions, contained in Clause 8.1 of the agreement, referred to above. Once the OPs committed the time, for the delivery of physical possession of apartment, to the complainants vide Newsletter, (Annexure R-2) and Apartment Buyer`s Agreement (Annexure C-1), they were bound to adhere to such commitment. Admittedly, in the instant case, the delivery of physical possession of apartment was delayed for a period of 13 months. The physical possession of apartment was handed over to the complainants, vide possession letter 19.07.2010. This clearly shows, that the OPs were deficient, in rendering proper service. Since, the OPs, retained the hard earned money of the complainants,  which they had deposited, towards the price of the apartment, and did not hand over the physical possession by the date, committed by them, nor there was any unforeseen circumstance, due to which they were unable to handover the physical possession, in time, certainly, the complainants were entitled to interest, at a reasonable rate, as, had they deposited this amount, in bank or invested the same, in some other business, they would have certainly got good returns. The complainants, thus, suffered financial loss. The OPs are, therefore, liable to pay interest @12% p.a., on the amount, deposited by the complainants, from 01.04.2009 (the date committed for handing over of the physical possession, as per C-1 being 31.03.2009), until the physical possession of apartment, was delivered, by the OPs, to them.

9.              The Counsel for the OPs, however, placed reliance on Haryana Urban Development Authority Vs. Raj Pathak & Anr., II (2010) CPJ 113(NC) and Bangalore Development Authority Vs. Syndicate Bank,  A.I.R. (2007) 2198 S.C., in support of his contention, that no interest could be granted, to the complainants, as the physical possession of apartment, was delivered even before the filing of the complaint. In Haryana Urban Development Authority`s case (supra), the symbolic possession was offered on 16th May, 2003 and the actual physical possession was delivered on 11.07.2008, to the complainants. The OP was held deficient, in rendering service, and interest was granted. No doubt, an observation was made, in this case, that the period of two to three years, for development was accepted by the Apex Court. The observations made, in this case, are of no help to the OPs. In Bangalore Development Authority`s case (supra), no time limit for delivery, was fixed in the brochure. Expected date of completion was incidently mentioned, in the letter, intimating the revised costs, to the buyer`s. Under these circumstances, it was held by the Apex Court that this did not make time as an essence of the contract. It was further held that the scheme was launched by the Bangalore Development Authority, on ‘no- profit –no-loss’ basis and no negligence, on the part of the Development Authority, was proved, whereas the physical possession of the  houses was delivered at the original price. It was, under these circumstances, that the Apex Court held that the complainant was not entitled to any interest. The facts and circumstances of the said case are clearly distinguishable, from the facts and circumstances of the instant case, because, herein, the scheme was not launched by the OPs, on ‘no- profit –no-loss’ basis. In the Newsletter (Annexure R-2), issued by the OPs, as also, in the agreement (Annexure C-1), definite time was fixed, after which the delivery of physical possession of apartment, was to be handed over to the complainants. As such, the time was the essence of contract, in the instant case. In this view of the matter, the complainants are entitled to interest, as indicated, in the foregoing para. The submission of the Counsel for the OPs, being devoid of merit, must fail, and the same stands rejected.

10.           It is a matter of common knowledge, that the builders, in the first instance, issue attractive and fanciful advertisements, to attract the gullible investors/ purchasers and receive enormous amount, from them, but, thereafter, do not stick to the schedule of construction. This course is adopted by them, intentionally, because, if they, in the very beginning, represent that the construction would be completed in 4 to 5 years, the number of customers, may be less, or their project may not get, as many buyers, as are needed. It, therefore, can be said to be an unfair trade practice, on the part of OPs, by giving such attractive, fanciful, and, misleading advertisements, knowing fully well, that they would not be able to complete the project, within the time mentioned, in the advertisements. They, thus, mislead the general public and prospective Buyer`s. The complainants invested huge amount of Rs.1,42,25,700/-, towards the price of the apartment, believing the representation of the OPs contained in the Newsletter (Annexure R-2) and agreement (Annexure C-1), to be true, that the project would be completed and physical possession shall be handed over to them by 31.03.2009. Since, the OPs did not stick to the time schedule, given by them, they certainly made false representation to the prospective Buyers, regarding the date of handing over the physical possession. For indulging into such unfair trade practice, the OPs are liable to pay compensation, to the complainants.

11.           The Counsel for the OPs, however, placed reliance on the terms and conditions, contained in Clause 8.1 of the Apartment Buyer`s Agreement (Annexure C-1), to submit that the OPs were entitled to reasonable extension of time, for delivery of physical possession of the residential apartments. No letter was written by the OPs, to the complainants, stating therein, the plausible reasons, which resulted into delay, in handing over the physical possession to them. Annexure R-3, is a copy of the letter dated 31.03.2009, whereby, provisional possession for fitout purposes was offered to the complainants. There is nothing, on the record, when and by which mode, this letter was sent to the complainants. The delivery of this letter to the complainants, thus, does not stand proved. Even otherwise, if it is presumed, that the provisional possession was offered to the complainants, vide this letter, that did not mean anything. The physical possession of the apartment, could only be legally handed over to the complainants, by the OPs, after the issuance of completion/occupation certificate. The delivery of physical possession, before that eventuality arrived at, could be nothing but illegal. It was for the OPs, to decide at the time of issuance of Newsletter (Annexure R-2) and entering into the agreement (Annexure C-1), as to, within which period, they could complete the project. Had, in the Newsletter, or the agreement, they had given, 4 to 5 years for the completion of project, it would have been said that they did not issue misleading advertisement. They were required to apply for the completion/occupation certificate, much before the date, committed for delivery of physical possession. If, on account of their own wrong, they did not apply for the same, or they could not apply for the same, as the project had not been completed, by the date committed, then the complainants, could not be blamed for the same. Under these circumstances, it could be said that the delay, in handing over the physical possession of apartment, to the complainants, was not on account of the circumstances, beyond the control of the OPs. So, the OPs, cannot take shelter under the provisions of Clause 8.1 of the ‘Apartment Buyer`s Agreement’ -(Annexure C-1). In this view of the matter, the submission of the Counsel for the OPs, that the OPs were not deficient, in rendering service, nor they indulged into unfair trade practice, does not appear to be correct, and deserves to be rejected.

12.           For the reasons recorded above, the complaint is accepted, in the following manner: -

                        i.   The OPs are directed to pay interest @12% on the amount, already deposited by the complainants, from 01.04.2009, till the actual date of handing over the physical possession of apartment to them.

                      ii.   The OPs are further directed to pay compensation, in the sum of Rs.1 lac, to the complainants, for indulgence into unfair trade practice, by giving misleading information in the Newsletter, and for causing physical harassment, and mental agony, to the complainants.

                    iii.   The OPs shall pay litigation costs of Rs.5,000/, to the complainants.

                     iv.   The amounts  mentioned in directions Nos (i) and (ii), shall be paid, within two months, from the date of receipt of a copy of the order, failing which the OPs shall pay the same with interest @15%, besides payment of costs.

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

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

Pronounced.

November  01 , 2011

Sd/-

[JUSTICE SHAM SUNDER]

PRESIDENT

Sd/-

[NEENA SANDHU]

MEMBER

RG