This Consumer Complaint is filed under Section 12 (1) (c) read with Section 13 (6) of the Consumer Protection Act 1986 (for short the ‘Act’) read with Order 1 Rule 8 of the Code of Civil Procedure, 1908  by the Complainants/Buyers against M/s Unishree Homes LLP  & Others alleging deficiency in service and unfair trade practice on account of delay in handing over the possession of the flats booked by the Complainants with the Opposite Parties in a project promoted and developed by them. The permission to file this joint complaint has been granted by this Commission, vide order dated 20.03.2018 in view of the decision rendered by a three-Members Bench of this Commission dated 7.10.2016 in CC No.97 of 2016 -  Ambrish Kumar Shukla & Ors. Vs. Ferrous infrastructure Pvt. Ltd. A public notice of the complaint was also published in the newspapers and pursuant to the said notice, several other allottees applied for impleadment in this complaint and were impleaded accordingly. It is stated in the complaint that all the Buyers who are part to this complaint are having common grievance i.e. failure of the Opposite Parties in handing over the peaceful legal possession of the flats within the time stipulated as per the Agreement executed with them and they want possession of the flats alongwith compensation for not handing over possession of their apartments on time. They have ‘same interest’ in terms of the judgement passed by this Commission in Ambrish Kumar Shukla (supra). Initially, 44 Complainants had instituted this Complaint. Vide order dated 01.10.2021, 34 complainants had already withdrawn their names out of 44 Complainants.

2.     The relevant facts of the case as per the Complainants, in brief, are that Opposite Party No.1 is a duly registered partnership firm and is the confirming party as well as the developer. Opposite Party Nos.2 to 4 were the owners and in possession of the property bearing Survey No.78, Thanisandra Village, K.R. Puram Hobli, Bangalore, East Taluk who executed a Joint Development Agreement (JDA) with Opposite Party No.1 dated 24.02.2012 for development and construction of the flats. They had also executed a General Power of Attorney in favour of Opposite Party No.1. The Complainants/Buyers booked units in the project “Unishree Terraza”, Bengaluru” with the Opposite Parties.  It is stated that in the Sale Agreement, all the Opposite Parties were jointly effecting the sale in favour of the Complainants/buyers and therefore the Opposite Parties, including the Developer and the landowners, are jointly liable for the numerous instances of unfair trade practices, restrictive trade practices and deficiency in services.

3.     The Opposite Parties launched a group housing project, in the name of “Unishree Terraza”, in Bengaluru in December,  2012 and made wide publicity of the facilities and amenities of the project. Believing upon the representations and tall promises of the Opposite Parties, the Complainants booked the flats during 2012-2015 and deposited booking amount from Rs.1 lakh to Rs.8 lakh. The Complainants opted for a ‘Construction Linked Plan’ wherein the purchasers was under obligation to make payment only on progress of construction. The Complainants diligently followed payment plan and all the Complainants paid about 85% to 95% of basic sale consideration, at regular intervals. Subsequently, the Opposite Parties executed the Sale Agreements with the Complainants. Some of the Complainants have taken loan from bank for payment of consideration. As per Clause (a) of Completion and Possession of the Memorandum of Sale Agreement, the legal possession of the flats were supposed to be handed over  within 36 months with an additional grace period of 6 months from the date of Commencement Certificate issued by BBMP subject to receiving the entire sale consideration and other charges and taxes. The date of Commencement Certificate issued by BBMP, is stated to be 24.08.2013.  42 months period including the grace period from 24.08.2013 the date of Commencement Certificate issued by BBMP, expired on 24.02.2017.  Therefore, possession of the units ought to have been delivered by 24.02.2017 including the grace period of 06 months. The grievance of the Complainants is that despite having been taken 85% to 95% of money from the Complainants, the Opposite Parties did not hand over to the Complainants the possession of the apartments alongwith Occupation Certificate, Completion Certificate and all promised facilities and amenities within the stipulated time as per the Agreements executed with the Complainants. Further, the Opposite Parties were also guilty of unilaterally reducing the carpet area of the flats without the consent of the Complainants. The Complainants kept inquiring from the office of Opposite Party about the exact date of possession but were given evasive replies without any deadline. The Complainants were informed through various emails that the construction would be completed soon and possession would be delivered in 2017 itself. However, vide email dated 02.08.2017, Opposite Party No.1 admitted that they would not be able to restart the construction for about 3 months. Thereafter, Complainants sent a legal notice on 05.06.2017 seeking redressal of their grievances since the purpose of booking the flats and making payment had been frustrated. The Complainants were bearing the double burden of  paying rent and also paying EMI of the bank loan. Alleging deficiency in service on the part of the Opposite Parties, the Complainants are before this Commission with a joint complaint seeking following relief:

“A. Direct opposite parties to hand over possession of the fully constructed; completed flats without any further delay to all the complainants and other flat buyers with same interest alongwith all permanent utilities promised as per agreement, copies of all relevant plans, approvals and Occupancy certificate issued by the relevant authorities.

B. Direct the opposite parties to pay to all the complainants/flat owners and other flat owners with same interest, compensation for the entire period of delay @ 18% per annum on the amount deposited by the complainants with the opposite parties till the time actual possession is given.

C. Direct the opposite parties to provide to the complainants and other flat owners with same interest at the time of possession each of the facilities and amenities which were promised in the agreement.

D. Direct the opposite parties to pay to the complainants and other flat owners with same interest additional compensation @ 18% interest per annum on the amount deposited for the delay in provision of the promised facilities and amenities. Or in the alternative, in case of non-provision of the promised amenities and facilities, direct opposite parties pay to the complainants and other flat owners with same interest a Rs. 10,00,000/- each.

E. Direct the opposite parties to refund to the complainants and other flat owners with same interest the sum charged illegally towards car parking along with 18 % percent interest.

F. Direct the opposite parties to pay to the complainants and other flat owners with same interest a compensation of Rs.10,00,000/- each by way of compensation for mental harassment and agony, to be distributed equally amongst the complainants and other flat buyers with same interest along with 18% interest.

G. Direct opposite parties to refund to the complainants and other flat owners with same interest the amount charged on account of service tax along with 18% interest.

H. Direct opposite parties to refund to the complainants and other flat owners with same interest the excess amount charged due to /on account of reduced carpet area with 18% interest.

I.   Impose on the opposite parties punitive damage of Rs. 20 Lakh to be paid to each of the complainants and all other buyers having the same interest.

J.  Direct the opposite parties to refund to the complainants and all other flat buyers having the same interest the amount illegally collected in the name of taxes along with 18 % interest.

K.  Award cost of the complaint to the complainants.

L. Pass any such further order or orders which this Hon'ble Commission may deem fit and proper in the interest of justice.”

4.     This Commission, vide order dated 20.03.2018, allowed IA/13072/2017and admitted the complaint under Section 12(1)(c) of the Consumer Protection Act, 1986 and granted 30 days’ time to Opposite Parties to file written reply in the complaint. Opposite Party No.1 was proceeded ex-parte as none appeared for them on 20.03.2018 and it also  did not file written reply. As such, vide order dated 28.12.2021, right of Opposite Party No.1 to file written reply was closed. However, vide order dated 22.02.2022, it was clarified that Opposite Party No.1 was directed to be proceeded ex-parte only while hearing and deciding the 12(1)(c) application and not in the complaint itself.  

5.     Parties led their evidence as well as affidavit of admission/denial of documents. The Complainants filed rejoinder to the reply filed by the Opposite Party Nos.2, 3, & 4 reiterating the averments made in the complaint. Complainants filed their short synopses of arguments although Opposite Parties did not file their short synopsis. Despite final opportunity given on 19.06.2023 to the Opposite Parties to be present and argue the case on 07.07.2023, failing which they would be proceeded ex-parte, only counsel for the Opposite Party No.2 is present. Hence, Opposite Party Nos.1, 3 and 4 are proceeded ex-parte. I have heard the Learned Counsel for the Complainants as well as Opposite Party No.2 and also carefully considered the material on record.

6.      The complaint was resisted by the Opposite Party Nos.2, 3 & 4  by way of reply. They submitted that the complaint is not maintainable qua Opposite Party Nos.2, 3 & 4 since they were not the service providers. It is submitted that they were the absolute owners of land bearing Survey No.78, measuring 2 acres situated at Bengaluru East Taluk, Karnataka.  Opposite Party No.1 approached them to develop the said land into a project ‘Unishree Terraza’ and accordingly, a Joint Development Agreement was executed on 24.02.2012. They also executed a registered General Power of Attorney in favour of Opposite Party No.1  to develop the said land into a residential apartment complex and also to sell the 64% of the super built area allotted to Opposite Party No.1. after obtaining the sanction plan. A supplemental sharing agreement dated 4.3.2013 was executed as per which the flats were apportioned in terms of Joint Development Agreement.  In accordance with the JDA, Opposite Party No.1 was supposed to (i) obtain sanction plan for the Project at its cost and expense (ii) undertake construction as per bye-laws, rules regulations and obtain all necessary permission etc. from concerned authorities (iii) commence and complete the Project within stipulated time.  Opposite Party Nos.2, 3 & 4 were not required to contribute anything towards preparations of drawing, plan sanction, development and constructions of the project including the OPs. 2 to 4's share of the constructed area as set out in the JDA.

7.      It is stated that Opposite Party No.1 had agreed to complete the construction within 36 months from the date of sanction building plan. Since the Opposite Party No.1/Developer obtained Sanctioned Plan and construction licence on 21.02.2013 as per the JDA, it was obligated to handover construction by 20.02.2016. However, Opposite Party No.1 had stopped construction work from May, 2015 without any notice to Opposite Party Nos.2, 3 & 4. Accordingly, they approached Opposite Party No.1/developer a number of times and also sent a legal notice on 12.09.2017 to cancel the JDA and revoke the General Power of Attorney. Further, it was very clearly mentioned in the sale agreements that the obligation of the construction rests with the Developer/Opposite Party No.1 who was the confirming party to the Sale Agreements and  Opposite Party Nos.2 to 4 have no role to play and no obligation whatsoever in the construction or completion of the Project in terms of the JDA and the sale Agreements. The Complainants were well aware of this aspect. Thus, Opposite Party Nos.2 to 4 were not liable for any breach of any covenant therein in view of the indemnification and obligations cast upon the Developer/Opposite Party No.1. It is stated that according to the JDA, Opposite Party No.1 was  obligated to indemnify and keep indemnified  Opposite Party Nos. 2, 3 & 4  against any action initiated by  any financial institution or agency or bank or any other action by the prospective Purchaser/Nominee for breach of the Sub-sale Agreements. It is submitted that the Complainants  issued a legal notice dated 05.07.2017 in this regard to which OPs 2 to 4 duly replied vide reply dated 06.07.2017. Moreover, as per the Sale Agreements all the disputes are to be decided through arbitration in terms of the Arbitration and Conciliation Act, 1996. Hence, this Commission has no jurisdiction to entertain the instant complaint. In the reply, it is stated by the Opposite Party that  delay in possession is to be dealt with as per clause 6(a) of the Sale  Agreement, according to which in case of delay in delivery of the apartment beyond the grace period for reasons other than Force Majeure, the Confirming Party/Developer shall pay the purchaser delay compensation @ Rs.5/- per sq. ft. per month. Thus, Opposite Party Nos.2 to 4 had no principal-agent relationship as alleged by the Learned Counsel for the Complainants. Reliance is placed by the Counsel for Opposite Party No.2 to clause (V) of the Sale Agreement which reads as under:

“V. WHEREAS the VENDORS have offered the "A" Schedule Property for development into a residential complex and whereas the CONFIRMING PARTY, who is a Developer has come forward to develop the "A" Schedule Property into a residential complex by obtaining the sanctioned plan and other statutory permissions, sanctions etc., from the jurisdictional competent authorities and the VENDORS have accepted the offer of the CONFIRMING PARTY/DEVELOPER and whereas the VENDORS have executed the Joint Development Agreement dated 24-02-2012, document No.720/2012-13, Book I, recorded in CD No. HLSD 54 and registered on 08.06.2012 at the office of the Sub Registrar, Halasoor, Bangalore in favour of the CONFIRMING PARTY/ DEVELOPER.”

8.     On behalf of the Complainants, it was averred that  the Opposite Parties had undertaken to hand over possession of the flats alongwith Occupancy Certificate, Completion Certificate and all promised facilities and amenities within a period of 36 months with an additional grace period of 6 months from the date of Commencement Certificate issued by the BBMP. The Commencement Certificate was issued in August, 2013. Hence,  period of 36 months expired in August, 2016 and the further six months' grace period expired in February, 2017.  Further, vide email dated 24.02.2017, Opposite Party stated that the flats would be handed over in September-October, 2017. He submits that  despite having  taken 85% to 95% of money from the Complainants, the Opposite Parties failed to hand over possession of the apartments to the Complainants. Learned Counsel submits that vide email dated 12.04.2022, it was informed that Occupancy Certificate  had been received although the same was not shared with them. Even if Occupancy Certificate was obtained on 12.04.2022  as claimed, even then the delay is writ large. He submits that Opposite Party Nos.2 to 4 were the landowners who executed a Joint Development Agreement (JDA) dated 24.02.2012 with Opposite Party No.1 (developer) for development of the said property into a residential complex. They had also executed a General Power of Attorney in favour of Opposite Party No.1.  It is averred that the Complainants paid regular instalments as per demands made by the Opposite Parties from time to time including service tax. It is pleaded that despite collecting substantial amounts from the Complainants and despite repeated requests through letters, emails, phone calls and personal visits, the Opposite Parties failed to deliver possession of the flats till the date of filing of the Complaint. It is further averred that the Complainants had purchased the Apartments for specific purpose of residence for their family and themselves and are suffering severe financial losses and mental agony. Reliance is placed on the order of this Commission passed in Prashant Telkar and Vijeta Kalghatgi & Ors. Vs. ND Developers Pvt. Ltd. & Ors. (CC No.3681 of 2017) dated 27.12.2022 in support of his case.

9.     He further submits that the Opposite Party Nos.2 to 4 had executed a JDA with Opposite Party No.1 and they were also parties to the Memorandum of Sale Agreement executed with the Complainants and were signatories to the agreements. They had jointly and severally sold the flats to the Complainants in both the landowner share flats and also the developer share flats. Hence, there existed a  privity of contract between the parties. To establish the relationship of Principal and Agent between the landowner and developer, reliance was placed on the order of this Commission in Pooja Daryani and Anr. Vs. Umang Realtech Pvt. Ltd. & Anr., CC No.2100 of 2017 decided on 23.12.2019 as well as judgement of the Hon’ble Supreme Court in Syed Abdul Khader Vs. Rami Reddy and Ors. (1979 2 SCC 601) and the order of the Bombay High Court passed in Govt. of Goa, Through Commissioner and Secretary Vs. Goa Urban Co-operative Bank Ltd. &Ors. (2011) 2 Mah LJ 37 : (2011) 3 Bom CR 382.

10.    I have considered the rival contentions of the parties. The objection raised by the Learned Counsel for the Opposite Party Nos. 2 to 4 that the clause of arbitration bars this Commission from entertaining the Complaint cannot be considered as pleaded in view of the judgement of the Hon’ble Supreme Court in M/S Emaar MGF Land Limited vs. Aftab Singh  I (2019) CPJ 5 (SC) wherein the Apex Court has laid down the law that an arbitration clause in an Agreement does not bar the jurisdiction of the Consumer Fora to entertain the Complaint.

11.   Clause VI of the Joint Development Agreement executed between Opposite Party Nos.2 to 4 and Opposite Party No.1 dated 24.02.2012 for development of Survey No.78 situated at Thanisandra Village, K.R. Puram Hobli, Bangalore East Taluk into a residential complex reads as under:-

“VI. WHEREAS the SECOND PARTY/DEVELOPER shall develop the Schedule Property into a residential apartment complex and has offered to allocate to the share of the FIRST PARTY/OWNERS - 36% of the super built up area and in consideration thereof of the FIRST PARTY/OWNERS do hereby permit the SECOND PARTY/DEVELOPER to sell the remaining 64% of the super built up area with proportionate undivided share in the land in favour of the SECOND PARTY/DEVELOPER or nominees of the SECOND PARTY/DEVELOPER.”

12.   Further Clause 2.1 of Plans/Licences of Joint Development Agreement reads as under:

“2.1 The SECOND PARTY/DEVELOPER shall at its cost and expenses obtain a sanctioned plan in respect of the Schedule Property for the construction of residential apartments from the jurisdictional planning authorities and the SECOND PARTY/DEVELOPER shall undertake the construction of the residential apartments on the Schedule Property as per the building bye-laws, rules and regulations in force and the SECOND PARTY/DEVELOPER shall at its cost obtain all such other necessary permissions, sanctions, clearances, including the permission from Airport Authority of India, Pollution Board, Fire Force Department, BESCOM, BWSSB, Lift Inspectorate, Commencement Certificate, Completion Certificate and all other necessary clearance as may be required to commence and complete the project within the stipulated period. The responsibility and expenses for preparing plans and obtaining necessary licenses sanction plans and all other permissions required to take up, commence and complete the construction of the multistoried Building/s in the Schedule Property shall be that of the SECOND PARTY/DEVELOPER. The SECOND PARTY/DEVELOPER shall make available to the FIRST PARTY/OWNERS one set of sanction plan and all other statutory sanctions granted by the jurisdictional competent authorities as the case may be.”

13. The clause titled a "COMPLETION AND POSSESSION" in the Sale Agreement read as under:-

“COMPLETION AND POSSESSION

a: The CONFIRMING PARTY/DEVELOPER hereby agrees to handover the "C" Schedule Apartment within 36 months from the date of commencement certificate issued by BBMP subject to receiving the entire sale consideration and all sums and charges payable towards amenities, taxes, charges etc. mentioned in this Memorandum of Sale Agreement.

b: The CONFIRMING PARTY/DEVELOPER shall be entitled to a grace period of six (6) months from the agreed date for delivery of possession of the "C" Schedule Apartment and the PURCHASERS shall not question any delay not exceeding six (6) months and cannot make it a ground to defer payments due as per the schedule of payment.” 

14.   From the above, it is clear that Opposite Party Nos.2, 3 & 4  were the landowners who executed a Joint Development Agreement dated 24.02.2012 with Opposite Party No.1 (developer) for development of the aforesaid property into a residential complex. In this regard, they had also executed a General Power of Attorney in favour of Opposite Party No.1. It is the Opposite Party No.1 which launched a group housing project, in the name of “Unishree Terraza”, in Bengaluru and made wide publicity of the facilities and amenities of the project. It is also evident that Opposite Party Nos.2, 3 & 4 were made parties to the Agreement by Opposite Party No.1 but none of them had signed the Sale Agreements executed with the present Complainants. The Agreements were signed by Opposite Party No.1 and the Complainants only. Since the Agreements were signed by Opposite Party No.1 only, the argument of Learned Counsel for the Complainants that Opposite Party No.1 is the Principal and Opposite Party Nos.2, 3 & 4 were its Agents, cannot be accepted.  The allegation made by Opposite Party No.1 against Opposite Party Nos.2, 3 & 4 that they being the land owners were also responsible for the construction of the apartments to the purchasers is an inter se dispute between the developer and the land owners, for which the Complainants cannot be made to suffer. It was very clearly mentioned in the Sale Agreements that the obligation of the construction rests with the Developer/Opposite Party No.1 who was the confirming party to the Sale Agreements and the Opposite Party Nos.2, 3 & 4 had no obligation whatsoever in the construction or completion of the Project in terms of the JDA and the Sale Agreements. Further, it was Opposite Party No.1 who had issued Payment Receipts to the Complainants.  Hence, Opposite Party Nos.2, 3, & 4 cannot be said to be  jointly and severally liable for not handing over legal possession of the units in time to the Complainants.

15.   It is manifest that there has been a huge delay of more than six years in handing over  possession of the apartments to the Complainants. However, in the Chart filed by the Learned Counsel for the Complainants giving details of the Complainants, the date of offer of possession is mentioned as 12.04.2022.  It is a fact that all the Complainants had signed the Agreements between the years 2013-2016. Also, all the Complainants have paid substantial amount of total consideration of their respective flats. As per Clause (a) of Completion and Possession of the Memorandum of Sale Agreement, the legal possession of the flats were required to be handed over within 36 months from the date of the Commencement Certificate issued by BBMP. Taking into account the additional 06 months grace period, the total period for completion of the units should have been 42 months. However, even after including this extended period,  Opposite Party No.1 failed to hand over possession of the apartments to the Complainants. It is also evident from the facts that Opposite Party No.1 has chosen not to contest the complaint by not filing a written version as well as short synopsis of arguments. The other Opposite Parties have also not filed their short synopsis of their arguments.

16.    In the present case, the offer of possession was offered to the Complainants on 12.04.2022. As per the ratio laid down by the Hon’ble Supreme Court in Ireo Grace Realtech Pvt. Ltd. Vs. Abhishek Khanna and Ors. in Civil Appeal No. 5785 of 2019 decided on 11.01.2021 since an offer of possession was made, the Complainants are obligated to accept possession although they would be entitled to delay compensation. The Hon’ble Supreme Court in Wg. Comdr. Arifur Rahman Khan Vs. DLF Southern Themes Pvt. Ltd. (2020 16 SCC 512) and DLF Home Developers Ltd. Vs. Capital Greens Flat Buyers Association (2021) 5 SCC 537 has held that 6% interest per annum from the date of promised possession till the date of offer of possession would be appropriate compensation for delayed possession. The Complainants are, therefore, entitled to seek possession with delayed compensation in light of the foregoing judgements.

17.   In view of the foregoing discussion and the facts and circumstances of the case, the Consumer Complaint is found to have merits and is accordingly partly allowed. The Opposite Party No.1 is directed to:

(i)     Complete the construction of the flats allotted to the Complainants in all respects, duly obtaining the requisite Occupancy Certificate, if not already received, at its own cost & responsibility and offer and give legal possession of the respective flats to the Complainants within 03 months of the receipt of this Order;

(ii)   Pay interest @ 6% per annum on the amount deposited by the Complainants from the due date of possession which would include grace period as per their respective agreements till the date of offer of possession, within a period of six weeks. In case of delay beyond this period, the delay compensation will be @ 9% per annum;

(iii)  Opposite Party No.1 shall also pay Rs.50,000/- as cost of litigation to the Complainant No.1 in each case.

18.   The complaint is disposed off with the above directions. All pending IAs, if any, are also disposed of by this order.