JUSTICE SUDIP AHLUWALIA, MEMBER

 

2. The factual background, in brief, is that the Opposite Parties announced the launch of a luxury integrated township project named “Amstoria” in Sectors-102 and 102A, Gurgaon, Haryana. The project aimed to offer various luxury housing options, including Farm Villas, Country Floors, and Lutyens Plots. Attracted by the promotion, assurances, and representations made by the Opposite Parties, the Complainants decided to book a unit in the project. They made an initial booking payment of Rs. 15,00,000/- and were subsequently allotted Unit No. A-26-SF, which had a Super Area of 2,833 Sq. Ft.  The total agreed consideration for the unit was Rs. 1,57,97,215/-. 

3. On 06.12.2012, after the payment of Rs. 29,76,900/-, the Opposite Parties executed a Floor Buyer's Agreement with the Complainants. However the Agreement contained several one-sided, arbitrary, and unreasonable clauses. They were forced to comply, as any disagreement would have resulted in the forfeiture of their Ernest money, equivalent to 25% of the total consideration. The unit, as per the layout plan annexed to the agreement, was specifically described as a 3BHK. According to the terms of the Agreement, possession of the unit was to be handed over within 30 months (24 months + 6 months grace period), meaning the deadline for delivery was June 2015.  Believing in the Opposite Parties’ promise of timely delivery, the Complainants made payments as per the Construction Linked Plan. By 03.03.2014, they had paid Rs. 1,07,90,364/-. In order to continue making these payments on time. The Complainants had to take a loan of Rs. 1,13,90,000/- from UCO Bank, which was later transferred to SBI.  However, after March 2013, the construction of the project stalled. The last payment demand raised by the Opposite Parties was on 03.03.2014, and no further demand was made until 20.03.2017, indicating a three-year construction halt without any communication to the Complainants. By 20.03.2017, the Complainants had paid Rs. 1,35,48,628/- to the Opposite Parties. On 29.11.2018, the Opposite Parties sent a letter offering possession of the unit, but this letter indicated that the Super Area of the unit had been changed to 3,106 Sq. Ft., a clear deviation from the 2,833 Sq. Ft. stated in the Agreement. This unilateral change in layout plans was not communicated to the Complainants, and it led to the Opposite Parties demanding an exorbitant additional payment of Rs. 78,15,445/-. 

 

 

4. Furthermore, the Opposite Parties had not only altered the Super Area but had also converted the terrace space into a room with a tin roof. The originally allotted 3BHK unit had now been transformed into a 4BHK without the Complainants’ consent. The Complainants hired a service called e-Ghar to inspect the unit, and an inspection report dated 21.01.2019 revealed severe deficiencies, making the unit uninhabitable. These defects included conversion of the terrace into a room, no electrical wiring throughout the unit, absence of flooring in any of the bedrooms, use of gypsum plaster instead of cement causing dampness, lack of final paint, sanitary fittings, deep cleaning and inadequate security measures. Despite the Complainants’ repeated representations and emails to the Opposite Parties in December 2018, addressing the additional charges, the altered Super Area, and the conversion of the terrace into a room, the Opposite Parties did not resolve these issues. Instead, they continued to raise demands for payment.

5. As the possession of the unit was initially promised by June 2015, the Opposite Parties did not only fail to deliver it within the promised timeframe but also offered a defective, altered, and uninhabitable unit. The Complainants assert that from the beginning, the Opposite Parties have acted with malicious intent, luring them with false representations and assurances which constitute ‘deficiency in service’ and ‘unfair trade practices’.   Hence, the present Complaint was filed praying for the following relief(s) –

 “1. Direct the Opposite Party(s), jointly and severally, for an immediate refund of INR 1,35,48,628/- (Rupees One Crore Thirty Five Lakh Forty Eight Thousand Six Hundred and Twenty Eight only) paid by the Complainants along with a penal interest of 18% per annum from the date of receipt of each payment made to the Opposite Party(s).

 

2. Direct the Opposite Party(s), jointly and severally, to pay compensation of INR. 10,00,000/- (Rupees Ten Lakh only) to the Complainants for mental agony, harassment, discomfort and undue hardships caused to the Complainants as a result of the above acts and omissions on the part of the Opposite Party(s);

 

3. Direct the Opposite Party(s), jointly and severally, to pay a sum of INR. 1,50,000/- (Rupees One Lakh and Fifty Thousand only) to the Complainants as a whole, towards litigation costs;”

 

6. The Opposite Party No. 1 filed their Written Statement and resisted the Complaint.  The Opposite Party No. 2, however, did not file any Written Version from its side, on account of which its right to file the same was foreclosed on 8.8.2019, after which the matter has been heard exparte against the said Opposite Party No. 2.  At the outset, the Opposite Parties have denied all the material allegations raised by the Complainants.  The Opposite Parties submitted that the matter should be referred to arbitration as per Clause 33  of the Floor Buyers Agreement (FBA) dated  06.12.2012 , which both the parties had mutually agreed to. This clause clearly establishes arbitration as the proper forum for resolving disputes; That the Complainants are investors rather than consumers as defined under Section 2(1)(d)  of the Consumer Protection Act, 1986. The booking of the unit was not for personal use but for resale, with the sole intention of making a profit. As such, the Complainants cannot claim the protections offered to consumers under the Consumer Protection Act.

7. It has also been contended that the Complainants had defaulted on several occasions in making timely payments, despite repeated reminders; That regarding the unilateral changes to the unit’s layout, the Complainants were well aware and had agreed to the possibility of alterations in the layout plan. The Clause 17 of the Application for Allotment and Clause 2.13 of the Agreement, allow for necessary changes to the Super Area and layout during the course of construction. Further, the Clauses 3.1 and 3.2 of the Agreement state that the layout plan was tentative, and any changes were within the agreed terms between the parties; Further according to the Opposite Parties, the issues raised by the Complainants involve intricate, complex, and disputed questions of fact that are beyond the scope of this Commission and are more appropriately addressed in a Civil Court.

8. Rejoinder on behalf of the Complainants to the Written Statement by the Opposite Parties has been filed; It has been stated in the rejoinder that while the Opposite Parties emphasize the Complainants’ obligation to make timely payments, they fail to acknowledge their own obligation to deliver possession of the unit, which was the essence of the Agreement. Under Clause 5.1 of the Agreement, they were required to hand over possession by June 2015, taking into account the 24-month period from the sanctioning of the building plan or execution of the Agreement, with an additional 6-month grace period. As per the Agreement, any extension in the delivery period could only be granted for reasons beyond the control of the Opposite Parties, which is not the case here. None of the reasons cited by the Opposite Parties fall under circumstances beyond their control, nor have they provided any conclusive proof to support these claims. The delay in possession is not due to any unforeseen factors, but rather a result of the Opposite Parties diverting funds from the “Amstoria” project to other ventures, which caused significant delays.

9. The Complainants have further claimed that the Opposite Parties had implemented a standard form of agreement, which was heavily one-sided and offered no room for negotiation by the Complainants. After paying a substantial amount, the Complainants were forced to accept the terms, even though the Agreement was unjust. Disputing these terms would have resulted in the cancellation of the allotment and forfeiture of their earnest money. The Complainants had no reason to suspect that a reputed developer like BPTP Limited would employ unfair terms to harass its buyers. The Opposite Parties were obligated to deliver the unit by June 2015, but possession was only offered in October 2018.  

10. The Complainants thus relied on the judgments of the Hon’ble Apex Court in “Pioneer Urban Land & Infrastructure Ltd. v. Govindan Raghavan, CA No. 12238/2018” and “Pioneer Urban Land & Infrastructure Ltd. v. Geetu Gidwani Verma & Anr, CC/238/2017”, in which it has been held that if a builder fails to deliver possession within the stipulated or reasonable time, the purchaser cannot be compelled to accept the late possession. The Hon’ble Apex Court has held that in such cases, the purchaser is entitled to a refund with interest. The present case mirrors this situation, as the Opposite Parties had failed to deliver the unit on time, and the Complainants had to continue servicing loans in the meantime.

11. Evidence by way of Affidavit has been filed by Complainant No. 1 Mr. Virender Singh Tanwar and Complainant No. 2 Ms. Balbiri Devi; Evidence by way of Affidavit has been filed on behalf of Opposite Parties by Mr. Inderjeet Singh, Authorized Representative of the Opposite Parties.

 

 

 

12. This Commission has heard both the Ld. Counsel for Complainants and the Opposite Parties, and perused the material available on record.

13. Ld. Counsel for Complainants has argued that the Agreement required the Opposite Parties to deliver possession of the unit within  30 months (including a 6-month grace period), meaning the possession was due by June 2015. However, the Complainants, despite making all payments on time and diligently following the construction-linked payment plan have not received proper possession of the unit. By 03.03.2013, the Complainants had already paid Rs.1,07,90,364/-. To fulfil their payment obligations, the Complainants secured a loan of Rs. 1,13,90,000/-  from  UCO Bank, later transferred to SBI . However, after March 2013, the Opposite Parties stalled construction without any notice or communication to the Complainants, and no further payment demand was raised until 20.03.2017. This delay of over three years clearly shows that the Opposite Parties had frustrated the legitimate purpose of the Complainants, who sought a home for their family; Further, in November 2018, the Complainants received a letter offering possession of the unit. The letter, however, listed the super area as 3,106 Sq. Ft., as opposed to the 2,833 Sq. Ft. originally agreed upon in the Agreement. This increase in area and corresponding increased demand of Rs. 78,15,445/- is an arbitrary action by the Opposite Parties. 

14. Furthermore, the Opposite Parties unilaterally changed the layout of the unit, converting the terrace area into a room with a tin roof, changing the unit from 3BHK to 4BHK, without any prior consent or communication from the Complainants; That upon hiring the services of e-Ghar for an inspection, the Complainants were provided with a detailed Inspection Report on 21.01.2019, listing several severe deficiencies that made the unit uninhabitable. These defects included inter alia no electric wiring throughout the unit, no flooring in any bedroom, use of gypsum plaster instead of cement plaster (which leads to dampness), incomplete paint, sanitary fittings, cleaning and inadequate security measures;

15. The Complainants repeatedly contacted the Opposite Parties through emails sent on 02.12.2018, 13.12.2018, 19.12.2018, 20.12.2018, and 25.12.2018, raising concerns about the irregular additional charges, the increase in super area, and the alteration of the terrace into a room. However, all those concerns were ignored and the Opposite Parties only continued to demand additional payments without addressing any of the Complainants’ grievances.

16. Now it is a matter of record that on 30.6.2023, Ld. Counsel for the Opposite Party, on instructions, submitted that they were willing to refund the principle amount alongwith interest @ 9% to the Complainants in five equal instalments, and sought liberty to place the Calculation Sheet to this effect, which permission was granted to the Opposite Parties on the said date.  On 11.7.2023, the Opposite Parties furnished a copy of the Calculation Sheet to the Complainant’s Counsel, but did not file the same on record.  On 1.8.2023, the Hon’ble Presiding Member, Hon’ble Mr. Subhash Chandra, noted that the said Calculation Sheet of 11.7.2013 was not supported by any Affidavit, and had certain discrepancies as pointed out by the Counsel for the Complainants. Consequently, a final opportunity was granted to the Opposite Party to file the Calculation Sheet with a copy to the Complainants before the next date of hearing.  The matter thereafter came up before the Hon’ble President on 5.10.2023, and thereafter before us on 18.9.2024, but no Calculation Sheet nor any Affidavit in terms of the Order dated 1.8.2023 was filed even till date.

17. On the other hand, Ld. Counsel for the Complainants submitted that the present case is squarely covered by earlier decision of this Commission in the case of “Raghbir Singh Vs. BPTP Ltd., CC No. 835 of 2021, decided on 11.11.2021”, and that both these Complaints pertained to the same Project “Amstoria” launched by the Opposite Party.

 

 

18. Even otherwise, it is settled law that a flat purchaser cannot be made to wait indefinitely for possession of his dwelling unit as held by the Hon’ble Supreme Court in “C.A No.3182 of 2019 dated 25.03.2019 -Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra”, in which it was observed, inter alia –

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

19. In the present case, the Opposite Parties had failed to offer possession to the Complainants for more than 3 years when although their deadline for such delivery of possession including the grace period had ended in June, 2015.  Their offer to refund payments made by the Complainants was therefore in itself is acknowledgment of their deficiency in service, and was in full consonance with the decision of the Hon’ble Supreme Court in “Pioneer Urban Land & Infrastructure Ltd.  Vs. Govindan Raghavan, II (2019) CPJ 34 (SC), decided on 2.4.2019” in which it was held -

“9. We see no illegality in the Impugned Order dated 23.10.2018 passed by the National Commission.  The Appellant-Builder failed to fulfil his contractual obligation of obtaining the Occupancy Certificate and offering possession of the flat to the Respondent- Purchaser within the time stipulated in the Agreement, or within a reasonable time thereafter.  The Respondent- Flat Purchaser could not be compelled to take possession of the flat, even though it was offered almost 2 years after the grace period under the Agreement expired.  During this period, the Respondent- Flat Purchaser had to service a loan that he had obtained for purchasing the flat, by paying Interest @ 10% to the Bank.  In the meanwhile, the Respondent- Flat Purchaser also located an alternate property in Gurugram. In these circumstances, the Respondent- Flat Purchaser was entitled to be granted  the relief prayed for i.e. refund of the entire amount deposited by him with Interest”.

 

20. The Complainants are, therefore, entitled to refund of the amount paid by them to the Opposite Parties alongwith compensation in the form of interest @ 9% p.a in view of the decision of the Hon’ble Supreme Court in "Experion Developers (P) Ltd. v. Sushma Ashok Shiroor, (2022) 15 SCC 286". The relevant extracts of the said Order are set out as below –

 

“32. We are of the opinion that for the interest payable on the amount deposited to be restitutionary and also compensatory, interest has to be paid from the date of the deposit of the amounts. The Commission in the order impugned has granted interest from the date of last deposit. We find that this does not amount to restitution. Following the decision in DLF Homes Panchkula (P) Ltd. v. D.S. Dhanda [DLF Homes Panchkula (P) Ltd. v. D.S. Dhanda, (2020) 16 SCC 318] and in modification of the direction issued by the Commission, we direct that the interest on the refund shall be payable from the dates of deposit. Therefore, the appeal filed by purchaser deserves to be partly allowed. The interests shall be payable from the dates of such deposits.

 

33. At the same time, we are of the opinion that the interest of 9% granted by the Commission is fair and just and we find no reason to interfere in the appeal filed by the consumer for enhancement of interest.”

 

21. Consequently, the present Complaint is allowed with the following directions-

(a)  The Opposite Parties shall refund to the Complainants the entire amount paid by them to the Opposite Party(ies) along with interest @ 9% p.a. from the respective dates of respective deposits till realisation, within three months from the date of this Order;

(b) The Opposite Parties shall also pay Rs. 50,000/- to the Complainants towards litigation costs;

 (c) In the event of non-compliance of this Order within the time specified, the outstanding amounts to be paid shall attract an interest at the rate of 12% p.a. till the time of final realization. 

 

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