JUSTICE DEEPA SHARMA, PRESIDING MEMBER

1.       The present complaint has been filed by the complainants seeking refund of their deposited amount of Rs.93,33.273/- along with interest @ 18% p.a. from the date of deposits till payment and also claimed a sum of Rs.5,00,000/- towards mental agony and harassment along with other appropriate relief. 

2.       The case of the complainants is that opposite party in the year 2012 launched a Group Housing Scheme known as “Ansal Highland Park” in Sector 103, Gurgaon, Haryana.  The project was widely advertised by the opposite party and on seeing the lucrative advertisement, the complainants approached the opposite party.  It was projected to them that the apartment would be delivered within 48 months from the date of execution of the agreement.  On this promise, the complainants applied for allotment of the apartment on 13.06.2012 and apartment no. Perth 404 measuring 1762 sq. ft was allotted. They signed the Builder Buyer Agreement on 02.04.2013.  The proposed date of possession was 02.04.2017.  The total consideration of the apartment was Rs.92,23,764/-.  The opposite party also provided the payment schedule and the complainants  duly paid the instalments.  The total amount paid by the complainants i.e. Rs.93,33,273/- also included the payment towards service tax etc.  It is submitted that complainants had been regularly visiting the site and found that no one was present at the site and the construction was not in progress. Despite taking considerable amount, the apartment was never constructed and the site was abandoned piece of land having only skeleton structure of semi constructed building.  The construction was not completed and the promise of delivery of possession within 48 months was never fulfilled by the opposite party.  The apartment was booked by the complainants with the intention of using it as home for their family and themselves.  As per clause 37 of the Builder Buyer Agreement, the opposite party had promised to pay compensation @ Rs.5/- per sq. ft. per month for the period of delay and it comes to Rs. 1.4% p.a. rate of interest.  It is submitted that this is disproportionate to the interest which the money which was deposited by the complainants with the opposite party would have fetched had it been kept in bank or otherwise.    It is submitted that since opposite party had failed to deliver the possession of the subject property even after expiry of several years, it amounts to deficiency in service and they should be directed to refund their money and award other compensation as prayed for. 

3.       Notice of the complaint was sent to the opposite party. The opposite party had filed its written statement.   In the written statement, several preliminary objections have been raised by the opposite party.  It is contended that this Commission has no pecuniary jurisdiction.  It is submitted that total basic price was inclusive of PLC, if any, and if we exclude EDC and IDC etc, said apartment was costing Rs.85,14,444/- and, therefore, this Commission has no pecuniary jurisdiction.  That the  high rate of interest has been claimed with the intention to bring the case within the pecuniary jurisdiction of this Commission.  It is further contended that complainants have booked the said apartment purely for commercial purpose. It is submitted that it was a sort of investment made by the complainants on the speculation of the price rise and it was for commercial gain.   Complainants are, therefore, not the consumers within the meaning of Consumer Protection Act, 1986 (now repealed by Consumer Protection Act, 2019).  It is further contended that as per clause 28 of the Flat Buyer Agreement, once the provisional allotment of the apartment is made, the complainants are not entitled for any refund.  It is further submitted that as per clause 31 and 32 of the Apartment Buyer’s Agreement, possession of the  apartment was to be delivered within 48 months with 6 months grace period from the date of execution of the agreement or from the date of obtaining all the required sanctions and approval necessary for commencement of constructions, whichever is later.  It is submitted that is subject to force majeure circumstances.  It is submitted that no cause of action had arisen in favour of the complainants.  Approval of the building plan was granted vide letter dated 16.04.2013 and the environmental clearance was given vide letter dated 15.10.2013.  It is submitted that because of certain circumstances which were beyond the control of the opposite party that the delay had occurred and had it not been there, opposite party would have delivered the possession in time.  It was submitted that there were orders of the Hon’ble High Court of Punjab and Haryana whereby extraction of ground water was banned in Gurgaon and vide orders of National Green Tribunal, mining of sand in Haryana and Rajasthan were banned.  There was reservation agitation in Haryana, there were orders of National  Green Tribunal to stop construction to prevent emission of dust in the Month of April 2015 and again in November 2016 and demonetization etc had adversely effected the progress of the project and caused delay.  It is submitted that these circumstances were beyond the control of the opposite party.  It is further submitted that from conjoint reading of clause 31 and 32 of the Agreement, opposite party is entitled to reasonable extension of time on the agreed date of delivery due to Force Majeure circumstances.  It is further contended that payment plan was construction linked plan and no demands were raised by the opposite party until the stage of particular construction arrived.  It is submitted that construction started in the month of May / June 2013 only.  It is submitted that complainants anticipated slump in the real estate market and loss in their investment and, therefore, they had filed the present complaint.  On these contentions, it is submitted that present complaint is liable to be dismissed. 

4.       Parties led their evidences.  They have also filed their written synopsises.  We have heard the arguments and perused the relevant record.

5.       The first argument of the learned counsel for the opposite party is that this Commission has no pecuniary jurisdiction.  It is submitted that after excluding EDC, IDC and service tax etc., the total basic sale consideration of said apartment was Rs.85,14,444/- and the complainants in their complaint had exaggerated the consideration amount by adding high rate of interest with the intention to bring it within the pecuniary jurisdiction of this Commission.  This fact is denied by the complainants and they have submitted that consideration amount of the apartment was Rs.92,23,764/- and they had actually paid sum of Rs.93,33,273/-.  It is not disputed fact that payment plan was construction linked plan and payment plan was given to the complainants which is ‘annexure A’ and this payment plan shows that total value of the apartment was Rs.92,23,764/- which included EDC, IDC, PLC etc. This document clearly proves that total consideration of the apartment was Rs.92,23,764/-.  This Commission has held in the case of Ambrish Kumar Shukla & Ors. Vs. Ferrous Infrastructure Pvt. Ltd., I (2017) CPJ 1 (NC) as under:

“15.        xxxxxx

Issue No.(iii)

“The consideration paid or agreed to be paid by the consumer at the time of purchasing the goods or hiring or availing of the services, as the case may be, is to be considered, along with the compensation, if any, claimed in the complaint, to determine the pecuniary jurisdiction of a Consumer Forum.”

6.       It is, therefore, clear  that agreed value of the services and the relief claimed determines the pecuniary jurisdiction of the Commission.  In the present case, the value of the apartment was Rs.92,23,764/- and the complainants in their complaint has claimed interest @ 18% p.a. and, therefore, had assessed the value of their complaint at sum of Rs.1,65,15,214/-.  It is settled proposition of law that pecuniary jurisdiction has to be determined on the basis of the contentions raised in the complaint.  We are satisfied that this Commission has pecuniary jurisdiction to entertain the present complaint.

7.       The next argument of the opposite party is that the complainants have booked the apartment for investment purpose but since they anticipated slump in the market,  they filed the complaint for refund of the amount.  It is submitted that this takes the complainants out of the definition of ‘consumer’.  It is argued on behalf of the complainants that they had booked the apartment for residential purpose but since there was an unreasonable delay in offering possession by the opposite party and there seems to be no offer of possession in near future as there was no construction activity going on at the site, they had filed the present complaint.   

8.       We have given our thoughtful consideration to the rival contentions.  In the case of Kavita Ahuja Vs. Shipra Estate Ltd. 2015 SCC Online NCDRC 2747, this Commission has clearly held that merely buying two or three houses or buying it for investment purposes does not ipso facto oust the complainants from the definition of ‘consumer’.  This Commission in Shipra Estate’s case (supra) has held as under:

“6.      Going by the Dictionary meaning of the expression 'Commerce' as far as hiring or availing services are concerned, a person can be said to have hired or availed services only if they are connected or related to the business or commerce in which he is engaged.  In other words, the services in order to exclude the hirer from the ambit of Section 2(1)(d) of the Act should be availed for the purpose of promoting, advancing or augmenting an activity, the primary aim of which is to earn profit with use of the said services.  It would ordinarily include activities such as manufacturing, trading or rendering services.  In the case of the purchase of houses which the service provider undertakes to construct for the purchaser, the purchase can be said to be for a commercial purpose only where it is shown that the purchaser is engaged in the business of purchasing and selling houses and / or plots on a regular basis, solely with a view to make profit by sale of such houses.  If however, a house to be constructed by the service provider is purchased by him purely as an investment and he is not undertaking the trading of houses on a regular basis and in the normal course of the business profession or services in which he is engaged, it would be difficult to say that he had purchased houses for a commercial purpose.  A person having surplus funds available with him would not like to keep such funds idle and would seek to invest them in such a manner that he gets maximum returns on his investment.  He may invest such funds in a Bank Deposits, Shares, Mutual Funds and Bonds or Debentures etc.  Likewise, he may also invest his surplus funds in purchase of one or more houses, which is/are proposed to be constructed by the service provider, in the hope that he would get better return on his investment by selling the said house(s) on a future date when the market value of such house (s) is higher than the price paid or agreed to be paid by him.  That by itself would not mean that he was engaged in the commerce or business of purchasing and selling the house (s).

7.      Generating profit by way of trading, in my view is altogether different from earning capital gains on account of appreciation in the market value of the property unless it is shown that the person acquiring the property was engaged in such acquisition on a regular basis and it was by way of a business activity.

8.  As observed by the Hon'ble Supreme Court in Laxmi Engineering Works (supra) what is a 'commercial purpose' is a question of fact to be decided in the facts of each case and it is not the value of the goods that matters but the purpose for which the goods brought are put to. The same would be equally applicable to for hiring or availing services.

9.  In any case, it is not appropriate to classify such acquisition as a commercial activity merely on the basis of the number of houses purchased by a person, unless it is shown that he was engaged in the business of selling and purchasing of houses on a regular basis. If, for instance, a person has two-three children in his family and he purchased three houses one for each of them, it would be difficult to say that the said houses were purchased by him for a commercial purpose. His intention in such a case is not to make profit at a future date but is to provide residential accommodation to his children on account of the love and affection he has for his children. To take another example, if a person has a house say in Delhi but he has business in other places as well and therefore, purchases one or more houses at other places where he has to live presently in connection with the business carried by him, it would be difficult to say that such acquisition is for commercial purpose.  To give one more example, a person owning a house in a Metropolitan city such as Delhi, or Mumbai, may acquire a house at a hill station or a place, which is less crowded and more peaceful than a Metropolitan city, in my view, it cannot be said that such acquisition would be for commercial purpose.  In yet another case, a person may be owning a house but the accommodation may not be sufficient for him and his family, if he acquires one or more additional houses, it cannot be said that he has acquired them for commercial purpose.  Many more such examples can be given.  Therefore, it cannot be said that merely because of the complainant had agreed to purchase three flats in the same complex the said acquisition was for a commercial purpose.”

9.       The findings of this Commission in Kavita Ahuja (supra) were reiterated by this Commission in Aloke Anand Vs. M/s Ireo Pvt. Ltd. & Ors. passed in Consumer Complaint No. 1277 of 2017 on 01.11.2021.  Relying on these findings, this Commission has further held that in such cases burden is upon the builder to prove that the complainant was indulging in commercial activities.  It has  held as under:

“12.          It is, therefore, clear that burden is squarely upon the opposite party to prove the fact that complainant is indulging in the business of sale and purchase of the flats. There is no contention in the written version that the complainant is indulging in the business of sale / purchase of the properties.  Since the opposite party has failed to discharge this burden, we hold that complainant is consumer within the meaning of Section 2 (1) (d) of the Act.”

10.     The findings of this Commission in Aloke Anand (supra ) wherein this Commission had relied on Kavita Ahuja’s case, were confirmed by the Hon’ble Supreme Court in Civil Appeal No. 180 of 2022 titled M/s Ireo Private Limited Vs. Aloke Anand dated 21.01.2022.

11.     There are no evidences on record to suggest even by preponderance that the complainants had been indulging in the business of buying and selling the properties.  The opposite party, therefore, has failed to prove that complainants are not the consumers. 

12.     Admitted facts of the case are that complainants were to get possession of the apartment within 48 months with 6 months grace period.  It is submitted that extraction of ground water was banned in Gurgaon by Punjab and Haryana High Court, therefore, construction was delayed.  This cannot be a ground for Force Majeure because the opposite party could have used tankers and other sources to get water for the construction purpose and, therefore, this plea of Force Majeure is not a valid plea. 

13.     As regards ban on the mining of sand in Haryana and Rajasthan is concerned, it is not such an act which was beyond the control of the opposite party or would have made it impossible for the opposite party to complete the construction because dust could have been obtained from other sources.  It is also submitted that delay had occurred due to ban on the use of dust in  2015-2016 by the National Green Tribunal.  It is expected form the opposite party that while making the promise regarding the date of possession, it should assess the anticipated date of possession after taking construction or the likely impediment in the construction.  The opposite party certainly would have considered all these factors and that is why it gave time of 6 months of Force Majeure.  It is also clear that no specific period during which the use of dust etc was banned by the National Green Tribunal has been mentioned by the opposite party.  It is apparent that promised date of possession was 02.04.2017 and the present complaint was filed in the year 2018 and continued till 2022 and till date, there is no evidence that construction had been completed and the occupancy certificate has been obtained.  Therefore, the ground that they could not complete the construction due to these reasons are meritless and baseless and has been taken with the intention to gain some advantage.  It is a proved fact that opposite party had failed to give offer of possession of the subject  apartment till date i.e. even after the expiry of five years. 

14.     Hon’ble Supreme Court in the case of Fortune Infrastructure & Anr. Vs. Trevor D’ Lima & Ors. (2018) 5 SCC 442 has clearly held that a person cannot be made to wait indefinitely for the possession of the flat allotted to him and he can seek refund alongwith compensation.   The relevant para is reproduced as under:

“15.  Moreover, a person cannot be made to wait indefinitely for the possession of the flats allotted to them and they are entitled to seek the refund of the amount paid by them, along with compensation. Although we are aware of the fact that when there  was no delivery period stipulated in the agreement, a reasonable time has to be taken into consideration. In the facts and circumstances of this case, a time period of 3 years would have been reasonable for completion of the contract i.e., the possession was required to be given by last quarter of 2014. Further there is no dispute as to the fact that until now there is no redevelopment of the property. Hence, in view of the above discussion, which draw us to an irresistible conclusion that there is deficiency of service on the part of the appellants and accordingly the issue is answered.  When once this Court comes to the conclusion that, there is deficiency of services, then the question is what compensation the respondents / complainants is entitled to ?”

15.     The Hon’ble Supreme Court in Bangalore Development Authority Vs. Syndicate Bank (2007) 6 SCC 711 has held that if the possession is  not delivered within specified time, allottee is entitled for refund.  The order reads as under:

“10.        xxxxxxxx

(a)         Where the development authority having received the full price, does not deliver possession of the allotted plot  / flat / house within the time stipulated or within a reasonable time, or where the allotment is cancelled or possession is refused without any justifiable cause, the allottee is entitled for refund of the amount paid, with reasonable interest thereon from the date of payment to date of refund.  In addition, the allottee may also be entitled to compensation, as may be decided with reference to the facts of each case.”

16.     It is argued on behalf of the opposite party that due to agreed force majeure clause in agreement, the opposite party is entitled for reasonable extension of time of delivery and complainants are not entitled to any delayed compensation.  Admittedly the due date of delivery was 48 months  in terms of clause 31, however, same was subject to force majeure clause 32 in the Apartment Buyer’s Agreement.  Clause 32 of Apartment Buyer’s Agreement gives unwarranted and uncontrolled and indefinite extended period for delivery of possession on ground of force majeure.  This clause is certainly not a fair clause.   Inclusion of clause 32 amounts to unfair trade practices as held in the in the case of Pioneer Urban Land and Infrastructure Ltd. Vs. Govindan Raghavan ( 2019) 5 SCC 725.   The Apex Court  has clearly held in this case that where the clauses are one sided and the incorporation of such one sided clause constitutes unfair trade practice, the purchaser of a flat cannot be compelled to be bound by the one sided contractual terms contained in the Apartment Buyer Agreement.    The relevant para is reproduced as under:

“6.8.   A term of a contract will not be final and binding if it is shown that that the flat purchasers had  no option but to sign on the dotted line, on a contract framed by the builder.  The contractual terms of the agreement dated 08.05.2012 are ex facie one-sided, unfair and unreasonable.  The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2 (1) ( r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the builder.”

17.     It is also argued by the learned counsel of the opposite party that in terms of clause 37, the complainants are entitled for the delayed compensation @ of Rs. 5/- per sq. ft. per month.  It is argued by the complainant’s counsel that the rate of interest thus comes to only around 1.4% p.a, which is totally unfair.    The Hon’ble Supreme Court has dealt with this issue whether allottes are bound by such a clause.            In the case of Wg.Cdr. Arifur Rahman Khan and Aleya Sultana & Ors Vs. DLF Southern Homes Pvt. Ltd. ( now known as Begur OMR Homes Pvt. Ltd.) and Ors. in Civil Appeal No. 6239 of 2019 with Civil Appeal No. 6303 of 2019, Hon’ble Supreme Court has held as under:

“22.  The only issue which then falls for determination is whether the flat buyers in these circumstances are constrained by the stipulation contained in clause 14 of ABA providing compensation for delay at the rate of Rs 5 per square feet per month. In assessing the legal position, it is necessary to record that the ABA is clearly one-sided. Where a flat purchaser pays the instalments that are due in terms of the agreement with a delay, clause 39(a) stipulates that the developer would “at its sole option and discretion” waive a breach by the allottee of failing to make payments in accordance with the schedule, subject to the condition that the allottee would be charged interest at the rate of 15 per cent per month for the first ninety days and thereafter at an additional penal interest of 3 per cent per annum. In other words, a delay on the part of the flat buyer attracts interest at the rate of 18 per cent per annum beyond ninety days. On the other hand, where a developer delays in handing over possession the flat buyer is restricted to receiving interest at Rs 5 per square foot per month under clause 14 (which in the submission of Mr Prashant Bhushan works out to 1-1.5 per cent interest per annum). Would the condition which has been prescribed in clause 14 continue to bind the flat purchaser indefinitely irrespective of the length of the delay? The agreement stipulates thirty-six months as the date for the handing over of possession. Evidently, the terms of the agreement have been drafted by the developer. They do not maintain a level platform as between the developer and purchaser. The stringency of the terms which bind the purchaser are not mirrored by the obligations for meeting times lines by the developer. The agreement does not reflect an even bargain.

23 On behalf of the flat purchasers it has been urged by Mr. R Balasubramanian (a submission which has not been controverted in rejoinder) that 95 per cent of the purchase price was paid during the course of the first two and a half to three years. The agreement did not stipulate that the developer would pay any interest on the amount which had already been received. A large chunk of the purchase price was thus available to the developer to complete construction. The court must take a robust and common-sense based approach by taking judicial notice of the fact that flat purchasers obtain loans and are required to pay EMIs to financial institutions for servicing their debt. Delays on the part of the developer in handing over possession postpone the date on which purchasers will obtain a home. Besides servicing their loans, purchasers have to finance the expenses of living elsewhere. To postulate that a clause in the agreement confining the right of the purchaser to receive compensation at the rate of Rs 5 per square foot per month (Rs 7,500 per month for a flat of 1500 square feet) precludes any other claim would be a manifestly unreasonable construction of the rights and obligations of the parties. Where there is a delay of the nature that has taken place in the present case ranging between periods of two years and four years, the jurisdiction of the consumer forum to award reasonable compensation cannot be foreclosed by a term of the agreement. The expression deficiency of services is defined in Section 2 (1) (g) of the CP Act 1986 as:

“(g) "deficiency" means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or  otherwise in relation to any service”

 24.  A failure of the developer to comply with the contractual obligation to provide the flat to a flat purchaser within a contractually stipulated period amounts to a deficiency. There is a fault, shortcoming or inadequacy in the nature and manner of performance which has been undertaken to be performed in pursuance of the contract in relation to the service. The expression „service‟ in Section 2 (1) (o) means a service of any description which is made available to potential users including the provision of facilities in connection  with (among other things) housing construction. Under Section 14(1)(e), the jurisdiction of the consumer forum extends to directing the opposite party inter alia to remove the deficiency in the service in question. Intrinsic to the jurisdiction which has been conferred to direct the removal of a deficiency in service is the provision of compensation as a measure of restitution to a flat buyer for the delay which has been occasioned by the developer beyond the period within which possession was to be handed over to the purchaser. Flat purchasers suffer agony and harassment, as a result of the default of the developer. Flat purchasers make legitimate assessments in regard to the future course of their lives based on the flat which has been purchased being available for use and occupation. These legitimate expectations are belied when the developer as in the present case is guilty of a delay of years in the fulfilment of a contractual obligation. To uphold the contention of the developer that the flat buyer is constrained by the terms of the agreed rate irrespective of the nature or extent of delay would result in a miscarriage of justice. Undoubtedly, as this court held in Dhanda, courts ordinarily would hold parties down to a contractual bargain. Equally the court cannot be oblivious to the one-sided nature of ABAs which are drafted by and to  protect the interest of the developer. Parliament consciously designed remedies in the CP Act 1986 to protect consumers. Where, as in the present case, there has been a gross delay in the handing over of possession beyond the contractually stipulated debt, we are clearly of the view that the jurisdiction of the consumer forum to award just and reasonable compensation as an incident of its power to direct the removal of a deficiency in service is not constrained by the terms of a rate which is prescribed in an unfair bargain.”

18.     The Hon’ble Supreme Court has clearly held that such clauses are not binding and consumer forums have to award just and fair compensation.

19.     In view of the above, we allow the complaint and issue the following directions:

1. The opposite  party  shall  refund  the  entire  deposited  amount of Rs. 93,33,273/- along with interest @ 9% p.a. from the date of deposits till the date of payment.
2. The opposite party shall also pay a sum of Rs.50,000/- towards litigation cost. 
3. The entire amount shall be paid within four months from the date of this order failing which the complainants shall be entitled for interest @ 12% p.a. from the date of each deposit till date of payment on the deposited amount.

20.     With these directions, the Consumer Complaint stands disposed of.