JUSTICE SUDIP AHLUWALIA, MEMBER

This Consumer Complaint has been filed under Section 21(a)(i) of the Consumer Protection Act, 1986 alleging deficiency in service on the part of the Opposite Party, and seeking compensation with ancillary reliefs.

2.      The factual background, in brief, is that the Opposite Party launched a Project in Sector 20, Panchkula named “Parikarma” which involved the development of a multi-storeyed residential group housing complex comprising of two categories of Units: Normal Apartments and AC Apartments.  The price difference between these categories was Rs.500/- per sq.ft. In September 2010, the prevailing prices were Rs.3400/- per sq.ft. for Normal Apartments and Rs.3900/- per sq.ft. for AC Apartments.  The AC Apartments offered several additional features, including air conditioning, a modular kitchen with a chimney and hobb, shower cubicles in bathrooms, a Jacuzzi, fans, and geysers. The Complainant applied for a Normal Apartment on 22.09.2010, and paid Rs.9,43,500 by cheque as 15% of the Basic Sale Price (BSP).  On 17.12.2010, the Opposite Party executed an Apartment Buyers Agreement  with  the Complainant, confirming  the  allotment of  Flat  No. 102 in Tower 9A.  Clause 25 of the Agreement stipulated that construction would be completed within three years from the date of the Agreement, with a penalty of Rs.10/- per sq. ft. per month for any delay beyond this period. Subsequently, the Opposite Party continued to demand instalments, which the Complainant paid through a combination of bank loans and personal savings. By the end of May 2013, the Complainant had paid a total of Rs.66,32,754/- to the Opposite Party, representing 90% of the BSP along with other charges. Although possession was expected by December 2013, the Complainant did not receive any communication regarding delays or the expected completion date.  Upon inquiry, the Opposite Party indicated that construction would be completed by March 2015 or March 2016, and that delivery of both the Normal and AC Flats would occur simultaneously.   In  such situation, the  Complainant  requested  a  change  from  a  Normal  Flat  to  an  AC Flat  and  paid  an  additional  sum  of Rs.14,94,745/- to  the Company on  29.07.2014.  Consequently, the  original  Agreement  was replaced by a new Agreement  for  an  AC  Apartment  on  31.07.2014, for Flat No.11-B/701.  This Agreement  also included a Clause for compensation of Rs.10/- per sq.ft. per month in the event of construction delays. On 26.08.2014, the Complainant sent an Email to the Opposite Party requesting the computation of delay compensation as per the terms of the original Agreement dated 17.12.2010. In response, the Opposite Party sent an Email on 02.07.2016, stating that possession of the Flat would be handed over shortly. A Demand Letter dated 01.09.2017, required the Complainant to pay Rs.16,66,817/- to take possession of the Flat, which included a delay compensation of Rs.3,71,233/-. Upon receiving the Demand Notice, the Complainant raised several issues in a letter dated 15.09.2017, including the incomplete state of the Flat and the Tower, various deficiencies in the Flat, incorrect application of GST and VAT, and improper compensation for the delay. Despite prolonged correspondences, these issues remained unresolved. Consequently, the Complainant got issued a Legal Notice through his Advocate on 09.03.2018, which elicited no response. Aggrieved by the deficiency in service by the Opposite Party, he then filed the present Complaint.

3. In the backdrop of the aforesaid facts, the Complainant has prayed as following -

“1. It is therefore, prayed that this Hon'ble Commission may direct the Respondent to pay the compensation amount of Rs.

41,17,807/- as requested by the Complainant as per relief sought under para 3 above alongwith future interest till the date of payment, as the Hon'ble Commission may direct.

2. That the Complainant is also entitled to the cost of the present litigation. The Hon'ble Commission is requested to direct the Respondent to compensate the Complainant suitably in this regard…”

4.      The Opposite Party filed its Reply and resisted the Complaint by contending, inter alia, that there is no jurisdiction under the Consumer Protection Act to amend or rewrite the terms of the Agreement. The Agreement envisages compensation of Rs. 10/- per sq.ft. per month, and the Allottee agrees that he shall have no other rights or claims against the Developer in this regard.  Clause 27 also states that Force Majeure conditions would not be considered as a delay; That the Complainant himself requested the Opposite Party on 29.07.2014 to cancel the allotment made in his favour in relation to the earlier allotted Apartment No. 102 in Tower 9A and further allotment of an AC Apartment in the same Project in Apartment No. 701 in Tower 11B.  The Complaint is barred by limitation as the Agreement was entered into between the parties on 31.07.2014, whereas the Complaint was filed in November 2019, i.e., five years after entering into the Agreement or five years after the cause of action arose; That the Complainant invested in the Apartment in question for commercial gains, i.e., to earn income by way of rent and/or re-sell the property at an appreciated value. The Complainant is residing in Gurgaon, Haryana, and the Apartment in question is located in Panchkula, Haryana. The said Apartment has been rented out by the Complainant after taking possession on 01.11.2019 to “ITC Limited,” a Company, for a rent of Rs. 36,500/-, which proves that it was purchased for commercial purposes and not for residential purposes; That the allegations in the Complaint are of a contractual nature and, as such, are only triable in a Civil Court. They assert that the direction under the Consumer Protection Act for awarding ‘compensation’ can only be as per conditions specified in Section 14(1)(d).

5.      Evidence by way of Affidavit has been filed by Complainant Mr. Ram Bhutani; Evidence by way of Affidavit has been filed on behalf of the Opposite Party by Mr. Rajender Kumar, Authorized Signatory of Suncity Projects Pvt. Ltd.

6.      This Commission has heard both, the Complainant appearing in-person and the Ld. Counsel for Opposite Party, and perused the material available on record.

7.      The Complainant appearing in-person has argued that the Opposite Party's assertion that "time is not of the essence of the agreement" is incorrect, as evidenced by the periodic demands for payments made following the booking of the Flat in September 2010. According to the Agreement, the construction was to be completed within three years from the date of its execution. Furthermore, the Opposite Party imposed interest at a rate of 24% for any payment delays. The stipulation of timelines for completion and payment within the agreement underscores that time is indeed of the essence; That the Opposite Party continually demanded payments starting from the Apartment booking in September 2010, receiving 90% of the Apartment's cost and other charges, by May 2013. However, service plan approvals were not received until 27.02.2013. This discrepancy indicates that either construction had commenced without the necessary approvals, or the Opposite Party had collected periodic instalments based on misleading communications regarding the stages of construction. Collecting 90% of the payment before securing the plan approvals is illegal, and implies that the Opposite Party should not have proceeded without these approvals; That the Opposite Party never provided any intimation in writing regarding any delays in possession/delivery, or that the construction would be completed by the end of 2015 or by March 2016. The original Agreement specified a construction period of three years. Even in the documents for the upgraded Apartment executed on 31.07.2014, it was indicated that completion was likely by March 2016; That the Opposite Party has demonstrated a deficiency in service and negligence by failing to accurately inform about the construction status, wrongfully securing periodic payments based on false information, and not providing the promised amenities in the AC apartment. The Agreement contained several one-sided Clauses that the Complainant could not alter at the time of execution; That deficiencies within the Apartment were reported to the Opposite Party during 3-4 site visits prior to taking possession, to which the Opposite Party responded that these were the only amenities available. A letter outlining the dissent and deficiencies was submitted to the Opposite Party upon taking possession; That the Opposite Party disclosed the liability for Haryana VAT only at the time of possession, without prior notice. The Opposite Party initially demanded VAT at a higher rate but subsequently reduced it after repeated objections from the Complainant and adjusted it in the final amount payable for possession.

8.      The total compensation claim of the Complainant is Rs.41,17,807/- which he has arrived at by claiming his entitlement firstly on account of deficiency in service by way of not providing for the agreed fixtures in his Flat, secondly on account of delay compensation firstly for his originally booked Flat of 1850 sq.ft. and then for the substitute Flat measuring 2150 sq.ft., thirdly for interest @ 24% p.a. on the amounts deposited by him, fourthly on account of the harassment caused to him, fifthly to claim refund of the VAT arrears wrongfully charged from him, and lastly, as legal fees of his Advocate for issuance of the Legal Notice prior to filing of the Complaint.  The detailed break-up of such amounts claimed by him are set out as below –

 “i)        Deficiency in service/not

providing the agreed fixtures in the flat

(details as per Appendix A)                                    : Rs. 16,15,096/-

(ii)        Calculation of compensation

for delay in delivery of flat:

a) Date of Agreement for 1850 sqft flat                            : 17.12.2010

b) Delivery date of flat as per agreement                         : December, 2013

    (within 3 years from the date of

    execution of Agreement.)

c) Date of Agreement for AC flat of 2150 sqft                 : 31.07.2014

d) Date of delivery of flat as per Agreement                    : March 2016

e) Date of offer of flat (Date of updated

    Demand-cum-lnvoice-letter)                                          : 30.09.2017

      = Rs. 20,01,596/-

Sub-Total (A)+(B) = (C)     

Note: (If the compensation for delay is worked

out at the rate of 24% p.a. i.e. the same

rate of interest which the Company has

charged on delay, this compensation amount

(at (B) above) by way of interest would work

out to approx. Rs. 85.80 lakhs for the period

of delay.)

iii) Interest @ 24% p.a. on (C) i.e.

Rs. 20,01,596/- (from 1.12.2017 to

31.10. 2019 for 23 months) (D)                         :           Rs. 9,20,734/-

iv) Compensation for the harassment

caused to the Complainant. (E)                        :           Rs. 10,00,000/-

v) Refund of Wrongful VAT arrears charged

for which no demand was ever raised

except at the time of issuing final invoice

for possession. (F)                                              :           Rs. 1,45,477/-

            vi) Legal Fee of Advocate for issuance of

Legal Notice (G)                                                   :           Rs. 50,000/-

Grand Total (C+D+E+F+G)                              =          Rs. 41,17,807/-”

9.      For the first of the aforesaid heads, the break-up and details provided by the Complainant in respect of alleged deficiency in service/not providing the agreed fixtures in the Flat are set out as below–

Appendix-A

Compensation for deficiency in services/Not providing agreed fixtures in the flat as per following details –

10.    His claim regarding compensation for delay in delivery of the Flat is first taken up for consideration.  In respect of the original Flat measuring 1850 sq.ft., the Agreement was executed on 17.12.2010 and the delivery date was within three years from the date of such Agreement i.e. in December 2013. When the Flat was not delivered within the permissible time, the Complainant claims that he was persuaded to purchase an alternate and comparatively larger 2150 sq.ft. Flat, to which he agreed, and the Agreement for subsequent Flat was executed on 31.7.2014, while the date of delivery of the Flat as per the Agreement was March 2016.  As by virtue of the subsequent Agreement, the previous allotment of the Complainant for the Flat measuring 1850 sq.ft. stood cancelled, and the money paid by him till that time was adjusted towards purchase of the substituted Flat, he, in the circumstances is entitled to delay compensation for the period after December 2013, i.e. when the original Flat was to be delivered to him, till termination of the earlier Agreement on 31.7.2014 i.e. for a period of about 7½ months.  The final corrected offer of possession for the subsequent Flat measuring 2150 sq.ft. was issued on 30.9.2017, which was 1½ years after the scheduled time for its delivery in terms of the Agreement dated 31.7.2014 (i.e. March 2016) had lapsed. He is, therefore, entitled to delay compensation for that period of 18 months in respect of the subsequent Flat as well.  The agreed delay compensation in each case was @ Rs.10/- per sq.ft. for each month of delay. Consequently, he is firstly entitled to compensation at the agreed rate for 7½ months in respect of original Flat measuring 1850 sq.ft. @ Rs.10/- per sq.ft. for each month, and at the same rate for 18 months in respect of subsequently purchased Flat measuring 2150 sq.ft. Such compensation at the agreed rate in respect of original Flat, therefore, comes to Rs.1,38,750/-, while such amount in respect of the subsequent Flat comes to Rs.3,87,000/-, thereby totaling Rs.5,25,750/-.  Admittedly compensation amounting to Rs.5 lac has already been paid to him by the Opposite Party, the net compensation in terms of the two Apartment Buyers’ Agreements signed by the parties, therefore, comes to Rs.25,750/- only.

11.    However, it has been held by the Hon’ble Supreme Court in various decisions especially in “Wing Commander Arifur Rehman Khan Vs. DLF Southern Homes Private Limited, (2020) 16 SCC 512” that in such Agreements in which the Flat buyer is made to sign on the dotted lines, since otherwise he stands to suffer tremendous financial loss on account of forfeiture of the substantial amount already paid by him to the Developer, then the terms and conditions of such Agreement cannot be accepted, being manifestly unfair and inequitable.  Consequently, the Flat buyer is also entitled to additional delay compensation over and above the nominal compensation provided under the Apartment Buyers Agreement. In the case of “Arifur Rehman” (supra) in which ultimately the possession was taken by the Allottees at a belated stage, the Hon’ble Supreme Court had held that those Flat buyers would be entitled  to delay compensation by way of additional simple interest @ 6% p.a. on the amounts paid by them towards purchase of their Flats with effect from the date of expiry of 36 months from the execution of the respective ABAs until the date of offer of possession after the receipt of the Occupation Certificates. This period of 36 months after date of execution of the Apartment Buyers Agreement would correspond to the time for delivery of the respective Flats of the purchasers from the date of their Agreement.  Consequently, the Complainant is found to be entitled to this additional delay compensation @ 6% p.a. on the amounts paid by him towards the original Flat for the period from the middle December 2013 till the end of July 2014, and on the amount paid thereafter till the date of final offer of possession i.e. 30.9.2017 from 1.8.2014 onwards.  For any additional payments made by him after 1.8.2014 till before issuance of the offer of possession dated 30.9.2017, he is also entitled to delay compensation @ 6% p.a. from the date of any such subsequent payment(s).

12.    The Chart showing the details of compensation for deficiency in service/not providing the agreed fixtures in the Flat as claimed by the Complainant has already been reproduced earlier. This Commission has carefully considered each item of 16 individual deficiencies alleged by the Complainant, but it does not find his claims to be convincing in their entirety. This is so, firstly, because in the column of “amount of compensation” as claimed by him, he has mentioned certain figures against each item without specifying how those amounts were justified, or the actual prices for the respective items as on the date of offer of possession i.e. 30.9.2017.  Secondly, some of his interpretations regarding non-providing of the Air Conditioners with heating facility or absence of any voltage stabilizers, again is not convincing because, it is to be remembered that  not only in the contemporary times in India, generally air conditioning is understood to be principally associated with ‘cooling’ and not heating, and such extended interpretation of the term as claimed by the Complainant was even lesser in vogue at the time when the original Apartment Buyers Agreement was executed 14 years ago in 2010. It is a matter of common knowledge that for many years now, air conditioning machines are invariably installed without any voltage stabilizers, and it has nowhere been case of the Complainant that at any stage during the last 6 to 7 years after possession was taken by him, any of the Air Conditioning machines installed by the Opposite Party had tripped due to absence of the voltage stabilizers.  He claims to have not been provided with the “Hobb” in the kitchen, but it transpires that the said appliance had actually been provided on 25.4.2024.  In view of the grievance of the Complainant regarding non-providing of the “AC Apartment” and the “Hobb” as promised, this Commission had directed both the parties to explain as to what was to be understood by the usage of these terms. It transpires that the meaning of “Hobb” is of basically a stove kind appliance to be placed on the kitchen slab.  There is no hard and fast rule that the same must have to be permanently fixed, or movable at the choice of the user. The Opposite Party has actually provided the appliance which is movable and not permanently fixed, and so it cannot be said that the promised item had not been provided at all as claimed by the Complainant.

13.    In respect of the items mentioned at Sr.Nos. 2,9,10,11 & 12 of the Chart, the principal grievance of the Complainant is that the specific make of these items as agreed were not provided, and in their place normal or local unknown marked items had also installed.  It is first to be noted that as per the Apartment Buyers Agreement itself, the Agreement was for providing of certain specified brands or their “equivalents”.   From the Affidavit filed on behalf of the Opposite Party in compliance with the Order dated 25.4.2024, it transpires that makes or brand name of all these items are approved by Indian Standard Institute (ISI), on account of which it cannot be said that the ‘equivalents’ in place of specific brands name in the ABA have not been provided.  In respect of item No.5, it is the own case of the Complainant that the promise of a “Full Modular Kitchen” was as understood by him on the oral explanation of the Company officials at the time of booking, and shown in the model Flat. There is no photograph on record to understand what was explained to the Complainant, or what he had actually seen in the model Flat.  In respect of item No.7 i.e. “bath tub” in the master wash room, it transpires that no such bath-tub was mentioned in the Apartment Buyers Agreement, but the Complainant understood that it would be provided by seeing the plan map in respect of the Flat, in which only the indication of a bathroom was to be inferred from the sign showing a bath-tub, as can be seen from a direct perusal of the Flat Plan.  In respect of the items at Sr. Nos.14, 15 and 16 description of the alleged deficiencies is too vague and non-specific to consider the nature and extent of the alleged deficiencies.

14.    In respect of item Nos. 3, 4 and 11, however, Ld. Counsel for Opposite Party at the time of final hearing fairly submitted that his client was agreeable to provide these facilities directly in the manner originally promised, if the Complainant was agreeable. This Commission, therefore, asked him whether he was agreeable to such proposal of the Opposite Party to which he replied on 25.4.2024 that the Apartment in question is presently under the occupation of his tenant, and so he needs some time to take instructions from his tenant in this regard.  On the subsequent date, however, the Complainant stated that it was not possible for him to accept the offer of the Opposite Party. In such circumstances, when this Commission has already noted that the specific amounts claimed by the Complainant towards various deficiencies alleged by him are not substantiated by any material on record to show what was the fair valuation of the concerned facilities as on the date of final offer of possession, it is unable to provide him with any relief on this ground in the Complaint, which is to be decided in a summary manner, whereas the actual admissible compensation, if any, for the alleged deficiencies would require detailed evidence to come to an effective and fair decision. For this limited aspect of claiming compensation on account of non-providing of the agreed fixtures, the Complainant is therefore advised to consider the option of approaching the competent Civil Court for redressal of his grievance.

15.    As the delay compensation by way of interest @ 6% p.a. in following the ratio in the case of “Arifur Rehman” (supra) has already been found admissible to the Complainant, he is not found entitled to any additional interest or compensation as claimed by him. Regarding the wrongful realization of the VAT amount from him at the stage of final hearing, the Complainant fairly admitted on the final hearing that the VAT amount actually charged from him was correct and not excessive.  Regarding the Legal Fee for issuance of Legal Notice for an amount of  Rs.50,000/- claimed by him, it may be observed that a detailed Legal Notice running into as many as 13 pages was firstly sent by him through his Advocate, Mr. Prabhat Kiran on 9.3.2008 to the Opposite Party.  Thereafter, a reminder of the same Notice was sent from his side three months later on 11.6.2008. The Notice on either date was identical, and if there had been no response to the first Notice, the Complainant was within his right to directly file the Complaint, on account of which there is no justification to provide him with any exorbitant amount just because he unnecessarily got the same Notice to be reissued for a second time. It is also a matter of record that throughout the hearing, the Complainant had appeared personally and not through any Counsel from his side.  He would therefore, appear to be entitled to reasonable litigation costs assessed at Rs.25,000/- in the given facts and circumstances.

16.    For the reasons mentioned above, the Complaint is allowed in part. The Opposite Party is directed to pay the delay compensation amount as directed in paras 10 and 11 along with litigation costs of Rs.25,000/- to the Complainant within two months from the date of this Order, failing which, any outstanding payment shall attract interest @ 8% p.a. till the date of final realization.

17.    For the purpose of raising any claim for compensation on the grounds of the alleged deficiency by way of not providing of the concerned fixtures in the Flat, the Complainant is advised to seek his remedy in an appropriate Civil Forum, considering the requirement of detailed evidence from the parties, without which no fair assessment can be arrived at in these Summary proceedings.

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