JUSTICE SUDIP AHLUWALIA, MEMBER

This Consumer Complaint has been filed under Section 58 of the Consumer Protection Act, 2019 alleging unfair trade practice by the Opposite Parties and seeking refund with other ancillary reliefs.

2.      The Complainant is an Association registered under the Haryana Registration and Regulation of Societies Act, 2012 and the Complaint is filed through its President, Mr. Sandeep Anand, on behalf of members of the Association, who are all Flat buyers in the Group Housing Project namely, ‘TERRA’ being developed by the Opposite Parties in Sector 37D, Gurgaon, Haryana.  It is submitted that the Flats have been booked by the members for themselves and their families. An amount of Rs.15,30,92,049/- has been paid by the concerned Members cumulatively to the Opposite Party No.1. The Opposite Parties together are developers of the Project and are all signatories to the Flat Buyer’s Agreements.

3.      It is the case of the Complainant that the Purchasers were induced into applying for allotment of the residential Flat based on representations and assurances made by and on behalf of the Opposite Parties. At that time, it was represented that the Project would in all probabilities be completed by end of June, 2015 and in any case the possession would be offered within 3.5 years from the date of booking/ allotment applications. Consequently, Flats were booked by submitting Allotment Applications along with booking amount varying from Rs.6,00,000/- to Rs.8,00,000/-. It is also stated that there existed a fiduciary relationship between the Purchasers and the Opposite Parties. It is averred that the Flat Buyer’s Agreement is in an entirely standard form, extremely prolix and unreadable, making it difficult for non-legal professionals to fully comprehend the same and it contained several unconscionable and one-sided terms and conditions and the Buyers signed on the same relying on Opposite Party No.1’s direction, advice and promise of speedy delivery of possession. It is further averred that contrary to the representation that the possession would be delivered in 3.5 years from the date of booking, the Agreement stated in clause 5.1 r/w clause 1.6 that the possession will be given in 42 months from the date of sanction of the Building Plan or execution of the Flat Buyer’s Agreement, whichever is later. Also, none of the consumers were informed about the grace period of 180 days. Hence, it is stated that there are stipulations in the Agreement and undertakings which were not informed to the Purchasers at the time of booking nor were explained to them even subsequently, thus constituting an unfair trade practice.

4.      It was further the case of the Complainant that under the ‘Subvention Scheme’ payment plan, the Opposite Party No.1 was to make interest payments on the loan till 30.06.2015 (the expected date of project completion) and only pre-EMI interest was payable on loans till 30.06.2015. Most of the Purchasers based their decision to book their Flats in the Project due to availability of Subvention scheme.

5.      It is also submitted by the Complainant that the obligation of the Purchasers to make payment for the Flat is contingent upon and reciprocal to the obligations of the Opposite Parties.  Hence, the Buyers were within their right to withhold payment, pending clarification and commitments from the Opposite Parties, and in cases of apparent construction delays. In the present case, despite booking of Flats in 2012, neither the Opposite Parties completed the Project nor are they anywhere close to offering possession of the Flats, nor they made any genuine attempt to complete the Project by 30.06.2015. The Opposite Parties have neither offered possession within 3.5 years from the date of boking nor within 3.5 years from date of Flat Buyer’s Agreement. The Opposite Parties have also failed to inform the Purchasers about the delays in construction, the causes of delay or even the expected date of completion despite repeated requests. The Opposite Party No.1 also imposed delayed interest on unpaid demand letters and issued termination and cancellation letters in case of Purchasers namely (i) Sandeep Bajpai; (ii) Vineet Love, Mohit Love and Sneh Love and (iii) Shreshth Tanwani. One of the buyers namely, Gautam Malik, also filed complaint bearing no.1033/2019 against Opposite Party No.1 before Haryana RERA which is also pending. A Legal Notice dated 06.12.2020 was also sent by some Buyers to the Opposite Parties on their registered Email IDs, but, no reply was received to the same.                       

6.      Hence, the Complaint has been filed alleging deficiency in services and unfair trade practices on the part of the Opposite Parties in failing to deliver the possession, delaying the completion of the Project by almost 9 years from the date of booking by various Flat Buyers and the completion is still not in sight. Therefore, the Complainant has prayed as follows:

   “(a) direct the Opposite Parties, to jointly and severally, refund the

entirety of the amounts received by Opposite Party No.1, from or on behalf of each and every Consumer (as stated in Annexure-C/2), along with interest @ 18% per annum, from the date on which such amounts were received, till the date of refund;

     (b) declare that the unfair trade practices adopted by the Opposite

Parties, as alleged in the present Complaint and otherwise, are null and void, and shall not create any rights in favour of the Opposite Parties, or any obligations on the Consumers, nor affect any rights and obligations they may have;

     (c) direct the Opposite Parties, to jointly and severally, pay a sum of

Rs.10,00,000/- to every Consumer on account of the mental agony, harassment, discomfort and undue hardships caused to them due the Opposite Parties’ deficiencies in services and unfair trade practices;

   (d) grant such other relief as this Hon’ble Tribunal may deem fit.”         

7.      The Opposite Parties have filed a joint written version to resist the present Complaint. They have at the outset denied all material averments made in the Complaint and have raised the following objections:

1. That the Complainant Association does not fall within definition of ‘Consumer’. There is no privity of contract between the Association and the Opposite Parties;
2. That the members of the Complainant Association are not entitled to file joint complaint and claim pecuniary jurisdiction of this Hon’ble Commission by adding value of subject matter of each individual case. The valuation should be done on the basis of individual claims of the customers which are less than Rs.10 crores. Each member of the Association has entered into a separate Floor Buyer’s Agreement with the Opposite Parties on different dates for different Flat sizes and under different payment schemes and a few of the Members have even defaulted in making payments. Thus, the Members are not identically placed;
3. That the Complainant Association has been formed only for the purpose of filing the Complaint. And this Commission vide order dated 05.05.2017 in CC no. 560 of 2014 titled as ‘Moulivakkam Trust Heights Flats Affected Buyers Association v. M/s Prime Sristi Housing Pvt. Ltd. & 29 Ors.’ had laid down essential characteristics of a Voluntary Consumer Association, and the present Complaint does not fall under the realm those characteristics;
4. That the present Complaint raises various complex questions of fact for which remedy ideally lies before a Civil Court;     
5. That the present matter is required to be referred to Arbitration as agreed between the parties vide Clause 17 of their respective Flat Buyer’s Agreement;
6. That the present Complaint is barred by limitation;
7. That out of 14 Members, 9 Members chose Subvention Payment Plan and in terms of the Subvention Scheme, the Opposite Parties have till date paid Rs.77,18,479/- to the Bank towards pre-EMI interest. The Members were aware at the time of booking of the Units that broad terms and conditions stated in the Application were only indicative in nature. Further, at the time of signing the Agreement, the Members had read, understood, agreed and accepted the terms and conditions therein. Also, the updates about the Project were regularly updated on the official website of the Opposite Parties;
8. That the proposed timeline for possession was within 42 months from the date of sanction of the Building Plan or the execution of the Agreement, whichever is later, along with a grace period of 180 days and was subject to Force Majeure circumstances, timely payments (Clause 7.1) and other factors;
9. That the Opposite Parties have provided a remedy of delay compensation under Clause 6 of the Agreement and the Members having agreed to the terms and conditions, cannot be permitted to claim anything beyond what has been reduced into writing between the parties;
10. That the proposed timelines have been diluted due to defaults in making timely payments by various allottees;
11. That some of the Members namely, Mr. Gautam Malik and Mr. Yogesh Bansal have filed Complaints before the Haryana RERA which are also pending. Hence, the Members have indulged in ‘Forum Shopping’;
12. That while the total number of units sold in the project is 401, 78 allotments have been cancelled for non-payment of dues. Further, 125 customers of the Project are in default of making payments for more than 365 days. And the projected timelines are based on cash flow. Further, along with the three customers mentioned in the Complaint, termination letter was also sent to Ms. Meenakshi Gupta and Ms. Neha Taneja;
13. That the construction of the Project is complete in all respects and application for grant of Occupancy Certificate (OC) has already been submitted on 18.01.2021 which may be issued soon. So, the process of handing over possession will start as soon as the OC is granted;  
14. That the Project was delayed due to reasons beyond the control of the Opposite Parties. That the construction was also affected on account of order of National Green Tribunal (NGT) order prohibiting constructional activity of any kind in the entire NCR;
15. That the construction of the Unit was going on in full swing and the Opposite Parties were confident to handover possession of the Unit by December, 2020. However, due to the Covid-19 pandemic, the period from March, 2020 onwards badly hit the entire economy of the Country including the Real Estate Sector, because of which construction came to a stand still;
16. That the Opposite Parties from time to time had updated the Members with respect to progress in the Project;
17. That the Members have invested in the Project for making gains and profits;                                                                           Therefore, the Opposite Parties have prayed that the complaint is liable to be dismissed.                                                                                                                                                          8.      Rejoinder has been filed on behalf of the Complainant. The Complainant at the outset has denied the material contents of Reply filed by the Opposite Parties. The Complainant has stated that the Complainant Association is a Voluntary Consumer Association as contemplated in Section 2(5)(ii) of the Consumer Protection Act, 2019 formed to work for the benefit of its Members. Reliance is placed on the ‘Aims and Objects’ of the Complainant. It is further stated that since all the persons on whose behalf the Complaint has been filed are seeking refund on the ground of extraordinary delay in offering possession, their claims can be combined into the present Complaint. It is further averred that the Opposite Party was not entitled to terminate any of the allotments, and all the consumers who withheld the payments, were entitled to do so on account of delay by the Opposite Party.  Reliance has also been placed on judgement dated 24.09.2004 of Hon’ble Supreme Court in ‘Haryana Urban Development Authority v. Mrs. Raj Mehta’. Moreover, the termination letters have no effect as the same were never acted upon, since the Opposite Party No.1 subsequently addressed letters offering possession to the persons whose allotments were allegedly terminated, but did not refund the sale consideration.

18. 9.      Further, the Complainant has brought to light the subsequent chain of events wherein the Opposite Party No.1 has issued letters of offers of possession during the pendency of the Complaint to consumers at serial Nos. 1,2,4,6,10,12 to 14 on 15.12.2021; 11 and 5 on 20.12.2021 and 23.12.2021 respectively and 14 on 22.09.2022. The said offers of possession have been issued without Occupancy certificate and are therefore illegal, sham and void. Moreover, the consumers have already invoked their legal right for refund and therefore these offers of possession and BPMS invoices are a wrongful attempt to overreach the judicial process. Further, the Opposite Party has illegally increased the super area by 10% and without any intimation to or consent of the allottees. Besides, the Complaints filed by both Mr. Gautam Malik and Mr. Yogesh Bansal before RERA have been withdrawn in order to pursue their remedy before this Commission.      

    10.    Affidavit in Evidence has been filed by President of the Complainant Association. Affidavit in Evidence has been filed by Mr. Inderjeet Singh on behalf of the Opposite Parties.

    11.    The Opposite Parties have stated in their Affidavit in Evidence that the following Members of the Complainant Association have entered into settlement with them. Those Members are as follows-

     

     

     

    S.NO.	MEMBER	DATE OF SETTLEMENT
    1.	Anil Kumar Sah	27.01.2023
    2.	Gautam Malik	30.01.2023
    3.	Vishal Verma/ Mangleshwar Nath Verma	27.02.2023
    4.	Shreshth Tanwani/ Santosh Kumar Tanwani	27.02.2023

     

    The above named Members have also filed their independent applications seeking deletion of their names from the array of parties. In addition, another couple by the names of Mr. Mohd. Shahid Alam and Ms. Niloffer, who are also similar Members/Allottees have also filed a separate application (IA No. 2428 of 2023) for deletion of their names, although there is nothing on record to show that they have entered into settlement with the Opposite Parties.

    12.    The Opposite Parties have further stated that construction of the project is complete and after receipt of Occupation Certificate, Offer of Possession has been issued to 10 members and units of certain members were terminated.

    13.    Heard the Ld. Counsel for the Complainant. Perused the material available on record.

    14.    It is a matter of record that the possession was to be delivered by the Opposite Party within a period of 42 months from the date of sanction of Building Plan or execution of the Flat Buyer’s Agreement, whichever is later.

    15.    The present Complaint is squarely covered by the judgement dated 04.01.2023 of this Commission in Consumer Complaint bearing No. 3023 of 2017 titled as ‘Virender Kumar Kataria v. BPTP & Anr.’ along with other connected Complaints as the Project in question in the present matter is same as the one in afore stated decided matter. Hence, we will not deal with the objections of the Opposite Parties as the same have been dealt with in detail in the aforesaid judgement wherein the Complaints were allowed.

    16.    This Commission noted in its judgement dated 04.01.2023 in Virender Kumar Kataria’s Case (Supra) that the Opposite Parties Developer was under an obligation to complete the Project and handover the possession latest by December, 2017 and it was the admitted case of the Developer that the Occupancy Certificate in respect of four towers has been obtained only on 09.12.2021. For the remaining two towers, it is not mentioned whether the Occupancy Certificate has been received or not. Even assuming that the Occupancy Certificate has been received for the remaining two towers also, there still is a delay of 04 years (approx.) in handing over the possession of the Units.

    17.    Further reliance is placed on Kolkata West International City Pvt. Ltd. v. Devasis Rudra, (2020) 18 SCC 613 

     

    “………8. The essential aspect of the case which is required to be analysed is whether the buyer was entitled to seek refund or was estopped from doing so, having claimed compensation as the primary relief in the consumer complaint. The buyer’s agreement is dated 2-7-2007. In terms of the agreement, the date for handing over possession was 31-12-2008, with a grace period of six months. Even in 2011, when the buyer filed a consumer complaint, he was ready and willing to accept possession. It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession. By 2016, nearly seven years had elapsed from the date of the agreement. Even according to the developer, the completion certificate was received on 29 March 2016. This was nearly seven years after the extended date for the handing over of possession prescribed by the agreement. A buyer can be expected to wait for possession for a reasonable period. A period of seven years is beyond what is reasonable. Hence, it would have been manifestly unfair to non-suit the buyer merely on the basis of the first prayer in the reliefs sought before the SCDRC. There was in any event a prayer for refund.

    9. In the circumstances, we are of the view that the orders passed by SCDRC and by the NCDRC for refund of moneys were justified.

    10. Having regard to all the facts and circumstances of the case, we modify the order of the NCDRC by directing that the appellant shall pay interest at the rate of 9% per annum to the respondent instead and in place of 12% as directed by the NCDRC. Save and except for the above modification, we affirm the directions of the NCDRC………”

    18.    Hence, the present Complaint is allowed in light of the judgement in Virender Kumar Kataria’s Case (Supra) and the Complainants are entitled to refund irrespective of grant Occupancy Certificate. The Opposite Parties have also terminated the allotment of a few Buyers and therefore, the Opposite Parties are directed to refund the sum paid by those Buyers.

    19.    As stated by the Opposite Parties in their Evidence Affidavit, the Buyers namely, Anil Kumar Sah, Gautam Malik, Vishal Verma/ Mangleshwar Nath Verma, Shreshth Tanwani/ Santosh Kumar Tanwani, have entered into Settlement Agreements with Opposite Parties and would therefore not be entitled to any relief in this matter.  Similarly, the Allottees, Mr. Mohd Shahid Alam and Ms. Niloffer, who have also filed IA No. 2428 of 2023 for deletion of their names from the array of parties shall also not be entitled to any relief in this matter. 

    20.    Consequently, the Complaint is allowed. The Opposite Party(ies)/Developers are directed to refund to the respective Complainants, whose names are mentioned in the list (Annexure-C/2; page 26 of the Paper Book), excepting the Complainants named in the proceeding Para 19 above,  the sum paid by each Buyer along with interest @ 9% from the respective dates of each deposit till realisation, within three months from the date of passing this Order;

    21.    In addition, the Opposite Party(ies) shall also pay Rs. 25,000/- to the respective Complainants, towards compensation/litigation costs;

    22.    In the event of failure of the Opposite Parties to pay the complete requisite amounts to the respective Complainants within the time specified, the outstanding amounts to be paid shall attract an interest rate of 12% p.a. thereafter till actual realisation.

    23.    Pending application(s), if any, also stand disposed off as having been rendered infructuous.