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 seeks refund of the amount deposited with compensation and other costs. 2. The complainant states that he booked a flat with the opposite party in their project “Raheja Navodaya” in Sectors 92 & 95, Gurgaon, Haryana and was allotted Apartment No. A-091A on the 9th Floor admeasuring 2350 sq ft for a sale consideration of Rs 62,66,000/-. A Flat Buyer Agreement (FBA) was signed between the parties on 12.11.2008 and possession was to be handed over within 36 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% as per clause 3.13. The complainant paid Rs 57,71,778/- in several instalments. However, possession was not offered after expiry of 36 months on 10.11.2014 which is alleged to amount to deficiency in service and unfair trade practice. Possession was offered after more than 5 years of delay on 10.01.2017. It is contended that the compensation for the delay @ Rs 7/- per sq ft per month has been withheld and compensation for a delay of 62 months amounting to Rs 10,19,900/- has been withheld. The complainant alleges that the opposite party has claimed an escalation of price by 10% without any proof of the same and that even this is contrary to the FBA which, as per clause 3.8, provided for an escalation free sale consideration up to 10% based upon input price index. It is claimed that a demand of Rs 9,18,970/- due to addition of balance sales consideration, electricity charges, escalation charges after adjusting compensation payable had been made without any details being provided. It is further stated that such a demand was made after having received Rs 8,88,787/- on account of escalation charges. It is also stated that there the demand includes Rs 3,80,641/- on account of water & electricity charges which was not part of the agreed consideration and that the Annexure to the offer of possession stated to be an “Explanation of charges” was completely silent regarding this aspect. Based on these additional demands, the complainant contends that the sale consideration has been unilaterally escalated to Rs 79,17,272/-. It is further contended that the opposite party enforced a one-sided Agreement which was an unfair trade practice since it did not contain proportionate liability clauses of commensurate penalty on the opposite party for any breach in discharge of its obligations, as in Clauses 3.13 and 4.2. The complainant was forced to sign an agreement containing onerous and one-sided clauses with no option to contest any of the clauses. The cause of action is stated to be a continuing cause as on the date of filing the complaint in June 2017. The complainant claims that this Commission has pecuniary jurisdiction as the claim is of Rs 1,00,85,858/- comprising principal amount and interest @ 12%. 3. Complainant is before this Commission with the following prayer: (i) direct the respondents, severally and jointly, to hand over possession to the complainant complete in all respects for the consideration mentioned in the agreement with all additional facilities and as per quality standards promised and execute all the necessary and required documents in favour of the complainant; (ii) direct the respondent to withdraw its demand for escalation charges and refund the amount collected from the complainant on account of the same along with interest @ 12% per annum; (iii) direct the respondent to withdraw its demand for water and electricity charges; (iv) direct the respondent to pay interest @ 12% p.a. on the amount deposited by the complainant with the respondent with effect from 36 months from the date of agreement till the date of actual physical possession as per clause (i), (ii), (iii) and (iv) above is handed over; (v) direct the respondents, severally and jointly, to pay a sum of Rs 3,00,000/- to the complainant towards litigation costs; (vi) pass any such order as deemed fit and proper. 4. Upon notice, the opposite party resisted the complaint by way of a reply and denied all averments and raised preliminary objections that (i) clause 3 of the Application Form stated clearly that the project may not have infrastructure in place on the date of possession as it was to be provided by the Government or its nominated agency (clauses 3 and 4.3) and therefore this was within the complainant’s knowledge; (ii) the period for handing over possession within 36 months from the date of the Agreement (FBA) was subject to force majeure circumstances as per clause 4.2; (iii) on 31.07.2012, the Hon. High Court in Sunil Singh Vs. Ministry of Environment & Forests & Ors., CWP No. 20032 of 2008 imposed a ban on use of ground water for construction purposes which delayed the project and was not within its control; (iv) land acquisition related litigation pertaining to Dwarka Expressway before the Hon’ble Punjab & Haryana High Court which delayed provisioning of basic infrastructure of water, electricity, sewerage, etc.; (v) the Agreement (FBA) has fair provisions governing both the parties such as clause 4.2 providing for compensation to allottees for delay in possession @ Rs7/- per sq ft per month; (vi) occupancy certificate was applied for on availability of access road in 2013 but was granted on 11.11.2016 but the complainant failed to take possession despite letter dated 10.01.2017 to avoid payment of the outstanding amount. 5. It is also contended that the complainant is not a ‘consumer’ under section 2(1)(d) being a resident of the USA who purchased the flat for investment purposes and not personal use; (ii) compensation under section 14(1)(d) of the Act is only payable if negligence is established while there is no such allegation in the complaint; (iii) there is no unfair trade practice since there was no allegation to ‘promoting’ the sale or services as contemplated under section 2(1)(r); (iv) adjudication in the complaint can only be by a civil court as the allegations are of a civil nature and cannot be dealt with in summary proceedings; (v) the parties are bound by the terms of the Agreement as held by the Hon’ble Supreme Court in Bharathi Knitting Co. Vs. DHL World Wide Courier, (1996) 4 SCC 704; (vi) no service was rendered under section 2(1)(o) since the agreement is for sale of an apartment and not for rendering construction services as held in Bangalore Development Authority Vs. Syndicate Bank, (2007) 6 SCC 711; (vii) an exorbitant claim or compensation without any supporting material is not sustainable; (viii) concealment of knowledge of non-availability of basic infrastructure at the time of booking which was a force majeure clause; (ix) pecuniary jurisdiction of this Commission is not met since Rs 8,88,787/- has been credited on 31.11.2016; (x) the complaint is barred by limitation since the Agreement was executed on 12.11.2008 and the period of admitting any grievance expired two years from that date. 6. 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 and on Union Bank of India Vs. Seppo Rally, (1999) 8 SCC 8. He also relies on Saurabh Prakash Vs. DLF Universal Ltd. (2007) 1 SCC 228 and Pawan Hans Ltd. Vs. UOI & Anr., (2003) 5 SCC 7 to argue that contractual obligations need to be tried only in a civil court. 7. 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. 8. The preliminary objections of the opposite party have been considered. The contention that the complainant is not a ‘consumer’ is a statement that has not been supported by any evidence to establish that the complainant is engaged in any real estate business. As per 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. Hence, 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. The opposite party has not brought any document on record that he has remitted the compensation of Rs 7/- per sq ft per month; the breakup of the particulars of charges payable filed by way of affidavit on 06.07.2023 mentions delayed compensation (payable) to be Rs 8,88,787/-. It is apparent that this amount has not been paid. Therefore, it needs to be included in the claim. As regards the issue of jurisdiction and the need to approach a civil court, the Hon’ble Supreme Court has held 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 not valid. 9. The opposite party has sought shelter under the force majeure clause citing delay due to the Hon’ble High Court’s order restraining builders from utilising ground water for construction activities. The issue has been inter alia considered in this Commission’s orders in Anil Kumar Jain & Anr. Vs. M/s Nexgen Infracon Private Limited in Consumer Complaint No. 1605 of 2018 dated 23.12.2019 wherein it was held that in the absence of any proof to substantiate the claims/reliance on force majeure conditions was not justifiable. The opposite party has failed to substantiate his contention with any specific evidence on record as to how the factors cited as force majeure events impacted the instant project and whether any steps to mitigate or overcome them were taken. Regarding opposite party’s reliance on force majeure events to justify delay in completing the construction of the project, as per Manoj Kawatra and Others Vs Pioneer Urban Land and Infrastructure Ltd., in CC no.1442 of 2018 decided on 01.11.2021, this Commission held that a developer cannot take shelter under the force majeure clause unless it is able to show that the event was unforeseen and unexpected. Opposite party’s contention that it could not undertake construction is not substantiated. If builders were prevented from extracting underground water, they were expected to arrange water from alternative sources to fulfil their contractual obligation to the flat Buyers. It is not as if no construction took place during the period that the interim order remained in force. Therefore, if the Opposite Party so wanted, it could have arranged water for construction purpose from alternative sources. There is no evidence brought on record that the Opposite Party could not arrange water required for timely completion of the project to constitute a force majeure event. In the absence of such evidence, mere reliance on such an assertion is not sustainable and cannot be accepted. 10. Opposite party’s contention that the project was delayed on account of the impediments to land acquisition is not supported by any evidence how it impacted the project in question. A general statement is made that projects along the Dwarka Expressway were delayed. However, there is nothing brought on record to support the contention that specific infrastructure works pertaining to the project in question were delayed due to land acquisition related delays. While it is stated that the occupation certificate was applied for in 2013 after the access road was constructed but was granted on 11.11.2016, no reasons for the delay are brought out. Merely ascribing this delay to the action or inaction by the Government or its agency without any basis to substantiate the allegation cannot be accepted. There must be cogent and specific reasons based on evidence to establish how the project in question was adversely impacted and why the stipulated period of 36 months stated by the opposite party for handing over of possession of the flat could not be adhered to. The opposite party did not defer any demands for instalments or inform the complainant of the likely delays in construction. Therefore, the contention of the opposite party that the delay was due to force majeure circumstances and hence not covered under section 14 of the Act as not ascribable to the opposite party does not sustain and cannot be accepted. 11. It is manifest that there was a promise of a residential scheme on the part of the opposite party while the delay is stated to be primarily due to the Government’s inability in not providing infrastructure. Liability for deficiency in service and unfair trade practice is also denied on the ground that the agreement was one for ‘sale’ and not ‘construction’, which is a ‘service’ and therefore beyond the scope of the Act. Under section 2 (1) (o) of the expression ‘service’ means a service of any description which is made available to potential users or allottees/ consumers, including the provision of facilities in connection with, inter alia, housing construction. The contention of the opposite party that the agreement was for ‘sale’ and did not involve any ‘service’ is erroneous as it was manifestly for the purpose of a flat to be constructed and sold and for which a time frame of 36 months was agreed upon. The opposite party is squarely under obligation to provide ‘services’ as laid down by the Hon’ble Supreme Court in Lucknow Development Authority vs M K Gupta, (1994) 1 SCC 243 that when a person pays consideration for the construction of a house/ flat, it is covered under ‘service’ as defined in Section 2 (o). 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 also been considered. It is evident from the record that the complainant has deposited Rs 57,71,778/- towards the consideration. It is also evident that the non-delivery of the flat as promised 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 for the reasons stated earlier. This averment, therefore, cannot be accepted since the agreement was clearly for handing over of possession of a flat which was to be constructed by the opposite party and payments were to be made in instalments. 12. The possession of the flat was to be handed over as per the agreement dated 12.11.2008 by 11.11.2011. Admittedly, the occupation certificate was applied for on 11.11.2016 and an offer of possession was made on 10.01.2017 i.e., after nearly 5 years 41 days. In view of the foregoing discussion, the contention of the opposite party regarding the delay not amounting to deficiency is not sustainable. 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, laid down 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 5 years and 1 month. Considering that the amount paid is substantial, seeking compensation for delay is not unjustified. 13. Opposite party’s contention that as per the FBA the conditionality for handing over possession within 36 months was the development of necessary infrastructure by the Government or its relevant agency and, therefore, the delay could not be ascribed to it has been considered in the light of the Hon’ble Supreme Courts’ judgment in Pioneer Urban Land and Infrastructure Ltd., vs Govindan Raghavan (2019) 5 SCC 725 in Civil Appeal no. 12238 of 2018 decided on 02.04.2019. The Hon’ble Supreme Court, relying upon the 199th report of the Law Commission, which held that “a contract or a term thereof is substantively unfair if such contract or the term thereof is in itself harsh, oppressive or unconscionable to one of the parties” and on Central Inland Water Transport Corporation vs Brojo Nath Ganguli (1986) 3 SCC 156 that in terms of Article 14 of the Constitution, courts should “strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract entered into between parties who are not equal in bargaining power”. The Hon’ble Apex Court also laid down that: “A term of contract will not be final and binding if, it is shown that the flat purchasers had no operation but to sign on the dotted line, on a contract framed by the builder………. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2 ® of the Consumer Protection Act, 1986 since it adopts unfair methods for the purpose of selling the flats by the builder”. In the instant case, the agreement/ FBA is very evidently wholly one sided unfair and unreasonable which places onerous conditions such as 18% penalty for delay in payments while offering a meagre compensation of Rs.7/- per sq ft per month for delay on its own part. It, therefore, constitutes an unfair trade practice under section 2 (r). 15. In Wg Cdr Arifur Rehman and Aleya Sultana Vs DLF Southern Homes Ltd. & Ors., Civil Appeals Nos. 6239 of 2019 and 6303 of 2019 dated 24.08.2020, (2020) 16 SCC 512 it was held that failure of the developers to comply with the contractual obligation to provide a flat to purchasers within the contractually stipulated period amounts to a deficiency. In relation to the performance of the service under the contract, the expression ‘service’ as per section 2 (1) (o) was held to be service of any description, including housing construction. The Hon’ble Supreme Court has held that; “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 upon a Consumer Forum 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 developers beyond the period within which possession was to be handed over to the purchaser. ……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. Whereas 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. 16. The opposite party contends that the complainant is barred by limitation. The Hon'ble Supreme Court in (i) Anshul Aggarwal vs New Okhla Industries Development Authority (2011) 14 SCC 578 held that delay in filing a complaint cannot be condoned unless a just and a sufficient cause is shown by a party seeking condonation and (ii) in Basawaraj and Ors., vs Special Land Acquisition Officer in Civil Appeal nos.6974 and 6975 of 2013 decided on 22.08.2013 - (2013) 14 SCC 81 held that: Sufficient cause is the cause for which defendant could not be blamed for his absence. The meaning of the word "sufficient" is "adequate" or "enough", inasmuch as may be necessary to answer the purpose intended. Therefore, the word "sufficient" embraces no more than that which provides a platitude, which when the act done suffices to accomplish the purpose intended in the facts and circumstances existing in a case, duly examined from the view point of a reasonable standard of a cautious man. In this context, "sufficient cause" means that the party should not have acted in a negligent manner or there was a want of bona fide on its part in view of the facts and circumstances of a case or it cannot be alleged that the party has "not acted diligently" or "remained inactive". However, the facts and circumstances of each case must afford sufficient ground to enable the Court concerned to exercise discretion for the reason that whenever the Court exercises discretion, it has to be exercised judiciously. The applicant must satisfy the Court that he was prevented by any “sufficient cause” from prosecuting his case, and unless a satisfactory explanation is furnished, the Court should not allow the application for condonation of delay. The court has to examine whether the mistake is bona fide or was merely a device to cover an ulterior purpose. In the instant case, the cause of action is a continuing cause of action and hence, in terms of Mukesh Kumar Gupta (supra), this argument cannot be accepted. 17. As regards the escalation of the sale consideration, it is relevant to note that the flat was promoted as being escalation free up to 10% of the sale consideration. The opposite party has, however, brought on record a certificate from its Chartered Accountant to justify cost escalation beyond 10%. This certificate is dated 14.11.2016. It is evident that the escalation as on 11.11.2011 needs to be considered rather than on a subsequent date since possession was promised as on that date. It would be an unfair trade practice on part of the opposite party to latch subsequent cost liabilities on the complainant. Accordingly, only an escalation of upto 10% on the consideration as on the date of promised possession i.e., 10% of i.e. Rs 62,66,000/- or Rs.6,26,600/- would be suitable. The opposite party has not provided this value. 18. As regards the charges for electricity and water connections, it is apparent that the opposite party has added these costs subsequently. A habitable unit has to necessarily have water and electricity connection. The sale consideration cannot be for a unit which is without these two essential facilities. The sale consideration cannot also be fixed without including these charges. However, once the sale consideration is fixed, including these charges subsequently is an unfair trade practice. It also goes against the promotion of the project as ‘escalation free’ since produce home buyers are likely to consider this assurance as a major factor in decision making. The agreement was clearly for an escalation-free price of the flat up to 10% of the cost. The price has to therefore, be inclusive of electricity and water connection since possession of a house cannot be offered without these essential requirements for habitation. A sale consideration stated to be escalation-free cannot be revised unilaterally and especially to provide essential facilities. Hence, these charges are inadmissible and deserve to be treated as part of the sale consideration mentioned in the agreement and the complainant is not liable to make additional payments for the same. 19. Although the opposite party has delayed the handing over of possession of the flat, the prayer of the complainant is for possession, with compensation for the delay and other reliefs as per the prayer in the complaint. The Hon’ble Supreme Court has, in Wg Cdr Arifur Rehman (Supra) held that compensation for delayed possession of a flat @ 6% per annum would be equitable and just. Compensation for the period of delayed possession from 11.11.2011, the stipulated date of possession to 10.01.2017, the date of offer of possession is, therefore, considered justified on the amount of Rs.62,66,000/- which stood paid as on 11.11.2011 by the complainant. Electricity and water connection charges levied by the opposite party are not valid in view of the escalation free price agreed upon and the complainant shall not be liable to pay the same. Escalation of 10% as on 11.11.2011 based upon the Chartered Accountant’s certificate shall be remitted to the opposite party by the complainant. The opposite party shall thereafter hand over possession to the complainant and complete the necessary formalities of the conveyance and sale deeds. 20. 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 shall hand over possession of the flat in question subject to payment of dues based on a sale consideration of Rs.62,66,000/-; (ii) Opposite party shall pay compensation for delay in offer of possession to the complainant @ 6% per annum on Rs.62,66,600/- which stood deposited on the date of offer of possession; (ii) Opposite party shall comply with this order within two months failing which the applicable rate of interest will be 9%; per annum; and (iii) Opposite party shall also pay the complainant litigation cost of Rs.50,000/-. The complaint is disposed of with these directions. Pending IAs, if any, also stand disposed of. |
