1.      This consumer complaint under section 21(a)(i) of the Consumer Protection Act, 1986 (in short, the ‘Act’) alleges unfair trade practice and deficiency in service in delay in handing over possession of a flat booked by the complainants in a project promoted and executed by the opposite party within the promised time and seeking refund of the amount deposited with compensation and other costs.

2.      The complainants state that they booked a flat with the opposite party in their project “Raheja Shilas” in Sector 109, Gurgaon, Haryana and were allotted Flat No. IF 14-02 admeasuring 2062.33 sq ft for a sale consideration of Rs 1,02,11,774/-. A Flat Buyer Agreement (FBA) was signed between the parties on 29.08.2011 and as per clause 4.2 possession was to be handed over within 30 months from the date of the FBA. Opposite party was liable to pay compensation @ Rs 7/- per sq ft of the super area per month for the period of delay. The penalty for delay in payment by the complainant was 18% on monthly compounded basis as per clause 3.15 Between 25.03.2011 and 04.02.2014 the complainant paid Rs 89,07,825/- in several instalments. Possession was not handed over after expiry of 30 months on 28.02.2014 which amounts to deficiency in service and unfair trade practice. Complainants state they are paying regular EMIs to opposite party no. 2 and despite lapse of over 6 years are without a house. Complainant relies upon this Commission’s judgment in A Malathi vs Raheja Developers Ltd., in CC No. 2014 of 2019 dated 14.06.2022. 

3.      Complainant prays for directions to opposite party to (i) refund Rs 89,07,825/- with 18% interest p.a. from the date of respective deposits till realization; (ii) pay Rs 10,00,000/- as compensation for mental harassment and agony; (iii) pay Rs 2,00,000/- as litigation expenses; and (iv) for any other orders deemed fit.

4.      Resisting the complaint by way of a reply, opposite party denied all averments and raised preliminary objections that (i) the complainant is not a ‘consumer’ under section 2(1)(d) being an investor who has deliberately not taken possession of the flat; (ii) the FBA was signed without coercion and with consent and cannot be agitated; (iii) the period of 24 months for construction with 6 months of grace period from the date of execution was subject to the Government providing necessary infrastructure and its non-provisioning was a force majeure condition for which the opposite party was not liable; (iv) compensation of Rs 7/- per sq ft per month was the opposite party’s liability only after the provisioning of necessary infrastructure by the Government; (v) the period of handing over possession of the flat has to be calculated after deducting the period spent in provisioning of the necessary infrastructural facility by the Government and other force majeure reasons; (vi) there was no cause made out for unfair trade practice under section 2(1)(r); (vii) allegation of deficiency in service is only to seek refund; (viii) no service was rendered under section 2(1)(o) since the agreement is for sale of an apartment and not for rendering construction services; (ix) compensation under section 14(1)(d) of the Act is only payable if negligence is established which has not been done; (x) adjudication in the complaint can only be by a civil court; (xi) the complaint is barred by limitation under section 24A since the FBA is dated 29.08.2011 and the two year period expired on 28.08.2013; (xii) this Commission lacks pecuniary jurisdiction as interest and compensation cannot be clubbed and relief for refund is not tenable in view of Tripartite Agreement dated 29.11.2011. 

5.      On merits, it is contended that the complainants are not related and are not consumers. The agreements dated 29.08.2011 are admitted but it is denied that possession was to be handed over in 30 months since as per clause 4.2 as it was subject to availability of infrastructure being made available by the Government. It is stated that the allegation relating to compensation @ Rs 7/- per sq ft being disproportionate to the levy of interest @ 18% for delayed payments was not tenable for the complainant at this stage after consenting to the agreement willingly. As no issue was raised earlier, the complaint is barred by limitation. The Tripartite Agreement with the bank is admitted and it is stated that as per clause 5 the proportionate share has to be refunded to the bank. Hence the complaint is stated to be untenable.  The opposite party relies on judgment of Hon’ble Supreme Court in Consumer Unity & Trust Society, Jaipur Vs. Chairman & Managing Director, Bank of Baroda Calcutta & Anr., (1995) 2 SCC 150 to argue that where no evidence is placed on record to prove loss, allegation for compensation under section 14(1)(d) is not justifiable; on Branch Manager, Indigo Airlines Vs. Kalpana Rani, MANU/SC/0095/2020 to argue that the burden of proof lies on the complainant as it is he who seeks a legal right; on B.B. Patel Vs. DLF Universal Limited, CA No. 1106 of 2009 dated 25.01.2022 to argue that no claim for refund is tenable after delay is accepted without protest under the doctrine of waiver. Reliance is also placed on this Commission’s judgment in Ekta Gupta Vs. Raheja Developers      in CC No. 635 of 2020 dated 13.12.2022 wherein possession was directed to be handed over within 9 months with delay compensation of 8% p.a. from the proposed date till the date of offer of possession.

6.      Parties led their evidence and filed rejoinder, affidavit, and evidence as well as short synopsis of arguments. I have heard the learned counsel for the parties and carefully considered the material on record.

7.      The preliminary objections of the opposite party have been considered. The contention that the complainant is not a ‘consumer’ is a bald statement that has not been supported by any evidence. The relationship inter se of the applicants has no bearing on the status of the complainants as ‘consumers’ under section 2(1)(d) of the Act.  In terms of this Commission’s orders in Kavita Ahuja Vs. Shipra Estates, I (2016) CPJ 31 and Sanjay Rastogi Vs. BPTP Limited & Anr., CC No. 3580 of 2017 dated 18.06.2020 the onus is on the opposite party to show that the complainants were in the business of buying and selling flats and therefore not ‘consumers’ purchasing the flat for a commercial purpose and this onus has not been discharged. This argument cannot be sustained. Insofar as pecuniary jurisdiction is concerned, the settled law on pecuniary jurisdiction as held by this Commission in Ambrish Kumar Shukla and 21 Ors vs Ferrous Infrastructure Pvt. Ltd., I 2017 CPJ 1 (NC) and Renu Singh vs Experion Developers Pvt. Ltd.,  CC no.1703 of 2018 is that the principle for determining the pecuniary jurisdiction is the total consideration paid by the complainant or persons who have joined the complaint in a joint complaint and other damages claimed to determine such jurisdiction. In view of this position of law the contention of the opposite party regarding pecuniary jurisdiction does not sustain. As regards jurisdiction in light of provision for arbitration in the FBA before a civil court, the contention of the opposite party cannot be accepted since the Hon’ble Supreme Court has laid down in M/s EMAAR MGF Land Ltd. Vs. Aftab Singh, I (2019) CPJ 5 (SC) that the arbitration clause in the agreement does not bar the jurisdiction of the Consumer fora and in M/s Imperia Structures Ltd. Vs. Anil Patni & Anr., (2020) 10 SCC 783 that the provisions of the Consumer Act are in addition to and not in derogation of any other law in force. As for the cause of action, the Hon’ble Supreme Court laid down in Meerut Development Authority Vs. Mukesh Kumar Gupta, IV (2012) CPJ 12 on 09.05.2012 failure to deliver possession constitutes a recurrent and continuing cause of action and therefore this contention of the opposite party is also not valid. The contention that the opposite party rendered no ‘service’ under section 2 (1) (o) of the Act as the agreement was only ‘sale’ and not ‘construction’ is entirely unacceptable as the FBA itself provides for construction and delivery within 30 months and did not promise the ‘sale’ of a flat already constructed. In Geetu Gidwani Verma & Anr. Vs. Pioneer Urban Land & Infrastructure Ltd. (2018) SCC Online NCDRC 1164 dated 23.10.2018 and Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan (2019) 5 SCC 725 the Hon’ble Supreme Court has held that (one sided agreement – UTP). Hence, the opposite party’s assertion that in view of their signing the FBA, the complainants were now not entitled to agitate the issues raised.

8.      The opposite party has relied upon applicability of force majeure in view of lack of infrastructure having been developed by the Government despite deposit of EDC charges with them. The clause in the FBA states that:

4.2    Possession Time and Compensation

That the Seller endeavours to give possession of the Apartment to the Purchaser within twenty-four (24) months from the date of the execution of this Agreement and after providing of necessary infrastructure in the sector by the Government, but subject to force majeure conditions or any other Government/Regulatory authority’s action, inaction or omission and reasons beyond the control of the Seller.

(Emphasis supplied)

The FBA is an agreement between the purchaser/complainant and the seller/opposite party for the purpose of handing over a flat specifically mentioned in the agreement as Flat No. IF 14-02 in the opposite party’s project viz., “Raheja Shilas” in Sector 109, Gurgaon, Haryana for which it would have obtained a licence and necessary approvals from the statutory authorities in the Department of Town and Country Planning, Government of Haryana. Admittedly, the project “Raheja Shilas” is a project of the opposite party. It has been promoted, inter alia, on the strength of the promise of delivery of apartments within 30 months. Its payment schedule is also based on this promise and assurance. At no stage of the project did it inform the complainant that since the infrastructure works were delayed by the agencies the project was delayed and neither was the payment schedule altered. There is no document on record to indicate that the infrastructure works were to be executed and completed by the Government in relation to the project “Raheja Shilas” in a manner that the promoters of the project would construct the apartment within 30 months as stipulated in the FBA. If the opposite party committed a timeline of 30 months, which significantly contained a grace period of 6 months, they should have obtained an occupation certificate within this period. The opposite party has submitted that the Occupation Certificate has been applied for on 27.04.2017 whereas possession was promised by 28.02.2014. Even by its own admission, the opposite party has admittedly delayed the execution of the project. No Occupation Certificate has been brought on record. If the lack of infrastructure was responsible for the execution of the project, it is moot why the period of 30 months was indicated in the FBA and instalments received from the complainant. It is also moot why the project was launched if the infrastructure was not in place. The attempt of the opposite party to latch responsibility of external infrastructure on a government agency and to claim immunity under force majeure cannot be accepted since there is no connection between the two.

9.      Manifestly there was a projection of a promise of a residential flat to lure potential residents when there was no plan in place to complete the project since it is now made contingent on external agencies with whom there was no cogent plan in place to achieve the milestones offered. Rather, once the instalments were collected, the buyers are sought to be non-suited on a multitude of grounds, primarily the liability of the Government in not providing infrastructure and to claim immunity from any liability for deficiency in service and unfair trade practice on this pretext, apart from the fact that the agreement is now stated to be one of ‘sale’ and not ‘construction’, which is a ‘service’. Such an approach needs to be deprecated and condemned in the strongest terms since it is clearly intended to dupe and defraud buyers who put their money in projects that are backed by the reputation of builders.

10.    The Hon’ble Supreme Court in Pioneer Urban Land and Infrastructure Ltd. Vs. Geetu Gidwani Verma & Anr., Civil Appeal No. 12238 of 2018 with No. 1677 of 2019 dated 02.04.2019 laid down that a buyer cannot be compelled to take possession of a flat when there is delay in delivery of possession by the builder and the buyer is entitled to refund along with compensation/interest for such delay. The Hon’ble Apex Court has also laid down that the consumer has the right to seek refund in view of the inordinate delay on the part of the opposite party in Pioneer Urban land and Infrastructure Ltd., vs Govindan Raghavan in Civil Appeal no. 12238 of 2018, (2019) 5 SCC 725  decided on 02.04.2019. The Hon’ble Supreme Court in Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra, Civil Appeal No. 3182 of 2019 decided on 25.03.2019 held that:

 “It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession”.

In the present case, the delay is of nearly 10 years. However, considering that the amount paid is substantial, seeking compensation for delay is not unwarranted. 

The law is well settled that if construction has not been completed and neither an occupation certificate obtained nor possession offered to the consumers, the opposite party could not compel the complainant to accept possession. The complainant-allottee is rather entitled to full refund with compensation. This position was reiterated in the Hon’ble Supreme Court’s judgment in Ireo Grace Realtech Pvt. Ltd. Vs Abhishek Khanna & Ors., CA No. 5785 of 2019 decided on 11.01.2021.

11.   The Hon’ble Supreme Court has explicitly laid down in Geetu Gidwani Verma & Anr. Vs. Pioneer Urban Land & Infrastructure Ltd. (2018) SCC Online NCDRC 1164 dated 23.10.2018 and Govindan Raghavan (supra) that allottees being forced to agree to onerous conditions in agreements after receiving substantial payment constituted an unfair trade practice and that an agreement that is one-sided and imposes conditions that are biased in favour of the builder/opposite party is an unfair trade practice. The FBA in the instant case is a classic example of such a document.

12.    Opposite party’s argument that no evidence is placed on record to prove loss, the onus of which is on the complainant and claim for compensation under section 14(1)(d) is not justifiable as negligence is not proved has been considered. It is evident from the record that the complainant has deposited Rs 89,07,825/- and there is a Tripartite Agreement with the bank for a loan to which the opposite party is also a signatory. Interest liability on the loan is in the knowledge of the opposite party in terms of the Agreement. It is also evident that the non delivery of the flat as promised has deprived the complainant the opportunity of occupying the said flat since April 2017 when it was promised to be delivered. Loss incurred is therefore evident. It is also apparent that the provisions of section 14 of the Act are attracted since the delay is attributable to the opposite party and no force majeure condition applies. 

13.    In view of the fact that there is neither any documentary evidence brought on record by the opposite party that the project is ready but for the infrastructure development by Government/HUDA nor even evidence that the Occupation Certificate has been applied for or obtained, deficiency in service and unfair trade practice is unconscionable and writ large. The argument of the opposite party is abysmally weak, ingenuous and contrived and raises far more fundamental issues which licence issuing authorities should consider before considering approvals in such cases.  In view of the foregoing, the complaint is liable to succeed.

14.    The claim of the complainant of compensation in the form of interest @ 18% p.a. has been considered. In Experion Developers Pvt. Ltd. Vs. Sushma Ashok Shiroor, CA No. 6044 of 2019 decided on 07.04.2022 and in DLF Homes Panchkula Pvt. Ltd. Vs. D.S. Dhanda, CA Nos. 4910-4941 of 2019 decided on 10.05.2019 the Hon’ble Supreme Court laid down that interest payable should be restitutionary and also compensatory and paid from the date of deposit. In Sushma Ashok Shiroor (supra) it was also held that interest of 9% is fair and just.

15.    Manifestly there was a projection of a promise of a residential flat to lure potential residents when there was no plan in place to complete the project since it is now made contingent on external agencies with whom there was no cogent plan in place to achieve the milestones offered. Rather, once the instalments were collected, the buyers are sought to be non-suited on a multitude of grounds, primarily the liability of the Government in not providing infrastructure and to claim immunity from any liability for deficiency in service and unfair trade practice on this pretext, apart from the fact that the agreement is now stated to be one of ‘sale’ and not ‘construction’, which is a ‘service’. Such an approach needs to be deprecated and condemned in the strongest terms since it is clearly intended to dupe and defraud buyers who put their money in projects that are backed by the reputation of builders.

16.   In the facts and circumstances of this case, for the aforesaid reasons, this complaint is allowed partially and disposed of with the following directions:

(i)     opposite party no. 1 shall repay the complainants the sum of Rs 89,07,825/- with interest @ 9% p.a. compensation for the delay in possession from the respective dates of deposit till the date of payment;       

(ii)    this order shall be complied within 2 months from the date of this order failing which the rate of interest will be 12% p.a.;

(iii)    the first charge of the repayment will be on the State Bank of India as per the Tripartite Agreement;

(iv)   opposite party shall also pay the complainant litigation cost of Rs 50,000/-.

All pending IAs shall stand disposed of with this order.