JUSTICE V.K.JAIN, PRESIDING MEMBER (ORAL)

The complainant in CC No. 11 of 2015 namely Harwinder Singh Ahuja booked a residential plot with the OP in a project namely ‘Aspen Greens’, which the said OP was to develop in Uniworld City, Sector-97, Mohali, Punjab.  A plot measuring 502.32 sq. yds. was allotted to him for a consideration of Rs.1,42,50,692/-.  As per clause 4.a of the Buyers Agreement dated 28.12.2011, the possession was to be delivered within 18 months of the said agreement, subject to force majeure circumstances.  Clause 4.e of the said agreement provided that if for any reasons, the developer was not at all in a position to offer the plot, it might offer an alternative property or refund the amount in full interest @ 10% per annum without any further liability to pay damages or any other compensation.  The possession of the aforesaid plot having not been delivered to the complainant despite he paying a sum of Rs.1,29,70,026/-, he is before this Commission with an implied prayer for refund of the amount paid by him alongwith interest.

2.      The complainants in CC No. 208 of 2015 namely Harish Chandra Raheja and his wife Rochika Raheja also booked a residential plot with the OP in the same project namely ‘Aspen Greens’ which the said OP was to develop in Uniworld City, Sector-97, Mohali, Punjab.  A plot measuring 502.32 sq. yds. was allotted to them for a consideration of Rs.1,16,26,196/-.  As per clause 4.a of the Buyers Agreement dated 17.08.2011, the possession was to be delivered within 18 months of the said agreement subject to force majeure circumstances.  Clause 4.e of the said agreement provided that if for any reasons, the developer was not at all in a position to offer the plot, it might offer an alternative property or refund the amount in full interest @ 10% per annum without any further liability to pay damages or any other compensation.  Despite the complainants paying a sum of Rs.1,06,64,128/- and the possession having not been offered, they are also before this Commission seeking refund of the amount paid by them alongwith compensation in the form of interest.

3.      The complainants in CC No. 605 of 2015 namely Amar Singh and his son Sarabjit Singh also booked a residential plot with the OP in the same project and a plot measuring 502.32 sq. yds. was allotted to them for a consideration of Rs.1,44,01,263/-.  As per clause 4.a of the Buyers Agreement dated 04.01.2012, the possession was to be delivered within 18 months of the said agreement subject to force majeure circumstances.  Clause 4.e of the said agreement provided that if for any reasons, the developer was not at all in a position to offer the plot, it might offer an alternative property or refund the amount in full interest @ 10% per annum without any further liability to pay damages or any other compensation.  Despite the complainants paying a sum of Rs.1,50,10,993/- and the possession having not been offered, they are also before this Commission seeking refund of the amount paid by them alongwith compensation in the form of interest.

4.      The complainant in CC No. 1476 of 2015 namely Gagandeep Singh Sandha also booked a residential plot with the OP in the same project and a plot measuring 358.80 sq. yds. was allotted to them for a consideration of Rs.71,77,794/-. As per clause 4.a of the Buyers Agreement dated 14.05.2012, the possession was to be delivered within 18 months of the said agreement subject to force majeure circumstances.  Clause 4.e of the said agreement provided that if for any reasons, the developer was not at all in a position to offer the plot, it might offer an alternative property or refund the amount in full interest @ 10% per annum without any further liability to pay damages or any other compensation.  Despite the complainant paying a sum of Rs. 68,84,073/- and the possession having not been offered, he is also before this Commission seeking refund of the amount paid by him alongwith compensation in the form of interest.

5.      The complainants in CC No. 1477 of 2015 namely Gagan Kohli and Vinod Kohli also booked a residential plot with the OP in the above referred project and a plot measuring 358.80 sq. yds. was allotted to them for a consideration of Rs.1,05,11,001/-.  As per clause 4.a of the Buyers Agreement dated 22.09.2011, the possession was to be delivered within 18 months of the said agreement subject to force majeure circumstances.  Clause 4.e of the said agreement provided that if for any reasons, the developer was not at all in a position to offer the plot, it might offer an alternative property or refund the amount in full interest @ 10% per annum without any further liability to pay damages or any other compensation.  Despite the complainants paying a sum of Rs.96,92,814/-  and the possession having not been offered, they are also before this Commission seeking refund of the amount paid by them alongwith compensation in the form of interest.

6.      The OP has resisted CC No. 11 of 2015, CC No. 208/2015 & CC No. 605 of 2015 whereas its right to file the written version has already been closed in CC No. 1476 of 2015 & CC No. 1477 of 2015.  The complaints have been resisted primarily on the grounds which this Commission had already rejected in a number of cases including CC No.449 of 2013 namely Parvinder Singh & Anr. V/s M/s Unitech Ltd. & Ors. decided on 12.02.2016.  The order passed by this Commission in Parvinder Singh & Anr. (supra), to the extent it is relevant, reads as under:

“3.      The complaint has been resisted by the OP Builder by filing a written statement before this Commission on several grounds though they admitted the agreement dated 13.05.2011 for the sale of plot E-65 with an area 502.32 sq. yards in Uniworld City, Sector 107, Mohali.  They also admitted that the sale consideration of the plot included the cost of development of internal services, such as laying of roads, laying of water/sewerage lines, electricity poles etc., which were to be provided by the OP.  The OP has also admitted in their reply that the possession of the plots was to be handed over to the complainants within 18 months of the date of the agreement, i.e., 13.05.2011.  However, the delivery of such possession was subject to force majeure circumstances and the OP was entitled to reasonable expansion of time for handing over the possession.  Clause 4(c) of the agreement also says that the OP will pay charges @₹50/- per square yard per month for the period of delay in handing over the possession, except when such a delay is caused by circumstances beyond the control of the OP.  The OP developer has stated that the force majeure conditions included the overall recession and financial problems facing the real estate industry, not only in India but at global level.  There was shortage of labour/work force in the Real Estate market due to active implementation of social welfare schemes like National Rural Employment Guarantee Act (NREGA) and Jawahar Lal Nehru National Urban Renewal Mission (JNNURM).  The OPs have further stated categorically in their reply filed on 07.02.2014 before this Commission that the development work had progressed now and the OP was hopeful of handing over the possession of the plot by the end of 2014, although, the possession of the plot had not been handed over till the date of final hearing of the case on 22.01.2016. 

4.      During the course of hearing, the learned counsel for the OP reiterated their version in the written statement that the possession of the plot could not be delivered due to circumstances beyond their control and this factor has already been laid down in the terms and conditions of the agreement between parties.  The learned counsel stated that there had been no deficiency in service on their part, going strictly by the terms and conditions of the agreement.  In support of his arguments, the learned counsel has drawn attention to the orders made by the Hon’ble Apex Court in “Bharathi Knitting Co. vs DHL Worldwide Express Courier Division of Airfreight Ltd. [(1996) 4 SCC 704]”, “Chief Administrator PUDA & Anr. Vs. Mrs. Shabnam Virk [(2006) 4 SCC 74]” and “Secretary, Bhubaneswar Development Authority vs. Susanta Kumar Mishra [(2009) 4 SCC 684]”. 

5.      Similar pleas have been taken by the said developer in a number of cases but the same have been rejected already.  The matter was discussed in detail in “Satish Kumar Pandey vs. M/s. Unitech Ltd.” [Consumer Complaint No. 427/2014 & other connected matters decided on 08.06.2015].  It was held by this Commission as under:-

“8.   Neither any new legislation was enacted nor an existing rule, regulation or order was amended stopping suspending or delaying the construction of the complex in which apartments were agreed to be sold to the complainants.  There is no allegation of any lock-out or strike by the labour at the site of the project.  There is no allegation of any slow-down having been resorted to by the labourers of the opposite party or the contractors engaged by it at the site of the project.  There was no civil commotion, war, enemy action, terrorist action, earthquake or any act of God which could have delayed the completion of the project within the time stipulated in the Buyers Agreement.  It was contended by the counsel for the OP that the expression ‘slow down’ would include economic slow-down or recession in the Real Estate sector.  I, however, find no merit in this contention.  The word ‘slow down’ having been used alongwith the words lock-out and strike, I has to be read ejusdem generis with the words lock-out and strike and therefore, can mean only a slow down if resorted by the labourers engaged in construction of the project.

9.     As regards, alleged shortage of labour, I find that no material has been placed on record by the OP that despite trying, it could not get labourers to complete the construction of the project within the time stipulated in the Buyers Agreement.  It was submitted by the learned counsel for the complainants that ordinarily big builders such as the OP in these cases, are contracting/sub-contracting the construction work to the contractors engaged by them, instead of employing their own labourers on a regular basis, the purpose being to ensure that they are not saddled with the wage bill of those regular labourers, in case the opposite party does not have adequate work for them.  There is no evidence of the OP having been invited tenders for appointment of contractors / sub-contractors for executing the work at the site of those projects and no contractor/ sub-contractor having come forward to execute the project on the ground that adequate labour was not available in the market.  Therefore, it cannot be accepted that the opposite party could not have arranged adequate labour, either directly or through contractors/sub-contractors, for timely completion of the project.  As regards the alleged shortage of water, bricks and sand in the market, I find that there is no evidence filed by the OP, to prove that it was unable to procure water, sand and brick in adequate quantity.  This is also their case that the notification of the Government, being relied upon by the opposite party, is an old notification, which was in force even at the time the opposite party promised possession in 36 months. There is no evidence of the opposite party having invited tenders for supply of bricks and water and there being no response to such tenders.  In fact, if the work is to be executed through contractors/sub-contractors, the material such as bricks, sand and even water will be arranged by the contractor/sub-contractor and not by the opposite party.  As noted earlier, there is no evidence of the opposite party having invited tenders after awarding the work of project in question to the contractors/sub-contractors and there being no response to such tenders.  Therefore, I find no merit in the plea that the completion of the project was delayed due to non-availability of water, sand and bricks in adequate quantity……………………………………

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11.    It is an undisputed proposition of law that ordinarily the parties are bound by the terms and conditions of the contract voluntarily agreed by them and it is not for a Consumer Forum or even a Court to revise the said terms.  The following view taken by the Hon’ble Supreme Court in this regard in Bharathi Knitting Company Vs. DHL Worldwide Express JT 1996 (6) SC 254 is pertinent: 

“It is seen that when a person signs a document which contains certain contractual terms, as rightly pointed out by Mr. R.F. Nariman, learned senior counsel, that normally parties are bound by such contract; it is for the party to establish exception in a suit.  When a party to the contract disputes the binding nature of the signed document, it is for him to prove the terms in the contract or circumstances in which he came to sign the documents need to be established.  It is true, as contended by Mr. M.N. Krishnamani, that in an appropriate case the Tribunal without trenching upon acute disputed question of facts may decide the validity of the terms of the contract based upon the fact situation and may grant remedy.  But each case depends upon its own facts”. 

In PUDA Vs. Mrs. Shabnam Virk II (2006) CPJ 1(SC), it was stated in an advertisement issued by PUDA that the price quoted therein was purely tentative based on the then cost of construction and was likely to be revised on the higher side by the time houses were completed.  The respondent before the Hon’ble Supreme Court challenged the demand of the additional cost raised by PUDA.  The demand however, was upheld noticing the aforesaid clause in the advertisement. 

However, a term of a contract, in my view will not be final and binding if it is shown that the consent to the said term was not really voluntary but was given under a sort of compulsion on account of the person giving consent being left with no other choice or if the said term amounts to an unfair trade practice.  It was submitted by the learned counsel for the complainants that the term providing for payment of a nominal compensation such as Rs.5/- per square foot of the super area having become the order of the day in the contracts designed by big builders, a person seeking to buy an apartment is left with no option but to sign on the dotted lines since the rejection of such term by him would mean cancellation of the allotment.  He further submitted that a person seeking to acquire a built up flat instead of purchasing a plot and then raising construction on it, therefore, is not in a position to protest resist the inclusion of such a term in the Buyer’s Agreement, and has to rely upon the reputation of the builder, particularly if he is a big builder such as Unitech Ltd.  He also submitted that the format of the Buyer’s Agreement is never shown to the purchasers at the time of booking the apartment and if he refuses to sign the Buyer’s Agreement on the format provided by the builder, not only will he lose the booking, even the booking amount/earnest money paid by him will be forfeited by the builder.  I find merit in the above referred submissions of the learned counsel.  A person who, for one reason or the other, either cannot or does not want to buy a plot and raise construction of his own, has to necessarily go in for purchase of the built up flat.  It is only natural and logical for him to look for an apartment in a project being developed by a big builder such as the opposite party in these complaints.  Since the contracts of all the big builders contain a term for payment of a specified sum as compensation in the event of default on the part of the builder in handing over possession of the flat to the buyer and the flat compensation offered by all big builders is almost a nominal compensation being less than .25% of the estimated cost of construction per month, the flat buyer is left with no option but to sign the Buyer’s Agreement in the format provided by the builder.  No sensible person will volunteer to accept compensation constituting about 2-3% of his investment in case of delay on the part of the contractor, when he is made to pay 18% compound interest if there is delay on his part in making payment. 

12.    It can hardly be disputed that a term of this nature is wholly one sided, unfair and unreasonable.  The builder charges compound interest @ 18% per annum in the event of the delay on the part of the buyer in making payment to him but seeks to pay less than 3% per annum of the capital investment, in case he does not honour his part of the contract by defaulting in giving timely possession of the flat to the buyer.  Such a term in the Buyer’s Agreement also encourages the builder to divert the funds collected by him for one project, to another project being undertaken by him.  He thus, is able to finance a new project at the cost of the buyers of the existing project and that too at a very low cost of finance.  If the builder is to take loan from Banks or Financial Institutions, it will have to pay the interest which the Banks and Financial Institutions charge on term loan or cash credit facilities etc.  The interest being charged by the Banks and Financial Institutions for financing projects of the builders is many times more than the nominal compensation which the builder would pay to the flat buyers in the form of flat compensation.  In fact, the opposite party has not even claimed that the entire amount recovered by it from the flat buyers was spent on this very project.  This gives credence to the allegation of the complainants that their money has been used elsewhere.   Such a practice, in my view, constitutes unfair trade practice within the meaning of Section 2(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practice for the purpose of selling the product of the builder.  Though, such a practice does not specifically fall under any of the Clauses of Section 2(r) (1) of the Act that would be immaterial considering that the unfair trades, methods and practices enumerated in Section 2(r) (1) of the Act are inclusive and not exhaustive, as would be evident from the use of word “including” before the words “any of the following practices”. 

6.      After considering the entire issue in detail, the Commission gave the following directions:-

“(a)     The opposite party shall deliver possession of the respective flats of the complainants to them on or before the last date stipulated in its letter dated 27.05.2015;

(b)    The opposite party shall pay to (i) the original allottees and (ii) to those who acquired the allotment by way of repurchase, within one year of the date of the initial Agreement of their respective flats, compensation in the form of simple interest at the rate of 12% per annum with effect from 36 months from the date of the initial Agreement till the date possession is delivered to them.  The interest payable till 31.08.2015 shall be paid by 10.09.2015, in three equal instalments, by the 10th of each month i.e. by 10th July, 2015, 10th August, 2015 and 10th September, 2015.  Thereafter, compensation in the form of interest, in terms of this order, shall be paid on monthly basis by the 10th of each succeeding month.

(c) Such of the complainants, who acquired allotment of the flat by way of repurchase more than one year after the date of the initial allotment of their respective flats, shall be paid compensation by way of simple interest at the rate of 12% per annum, with effect from 36 months from the date of repurchase by them, till possession is delivered to them.  They will also be paid compensation at the rate of Rs.5/- per square foot of the super area of their respective flat for the period between 36 months from the date of the initial Buyers Agreement of their respective flats and 36 months from the date of repurchase of the flat by them.

(d)   The increase in service tax with effect from 01.06.2015 shall be borne by the opposite party, in all these cases.

(e)  If the opposite party fails to deliver possession by the last date stipulated in its letter dated 27.05.2015, it shall pay compensation to all the complainants in the form of simple interest at the rate of 18% per annum, for each day there is delay, beyond the date stipulated in the said letter dated 27.05.2015, in delivering possession to the complainants.

(f)   The opposite party shall pay Rs.5,000/- as the cost of litigation in each complaint.”

7.      The matter was also considered by this Commission in another case “Swarn Talwar & Ors. vs. M/s. Unitech Ltd.” [Consumer Complaint No. 347/2014 & other connected matters decided on 14.08.2015], in which similar pleas had been raised by the same builder in not delivering the possession of residential apartments to the complainants within the time stipulated in the agreement.  After considering the entire issue, a direction was issued to the OP Builder to refund the amount paid to it by the complainants alongwith compensation in the form of simple interest @18% p.a. from the date of deposit till the date of payment.  OP Builder filed appeal against this order before the Hon’ble Supreme Court as Civil Appeal Diary No. 35562/2015 and the same was dismissed by the Hon’ble Supreme Court.

8.      In the case before us, there is no evidence provided by the OP to justify the plea that they could not carry out the necessary development works in time and provide the plot in question to the complainants in accordance with the terms and conditions of the agreement.  There is no evidence of any tribunal or authority having restrained them from going ahead with completion of the project.  The shortage of labour or other material required for development of the area cannot be said to be an act of God or reasons beyond the control of the OPs.  The plea of overall recession and financial problems facing the Real Estate Industry is quite vague and does not justify the action of the OPs in not completing the project and using the hard-earned money deposited by the complainants for his own gain. 

9.      In the written statement filed by the OPs, it was stated that most of the development works like laying of sewerage line and storm water pipelines have been completed and the OPs were hopeful of handing over the possession of the plot by the end of the year 2014.  However, the OPs could not fulfil their revised commitment and even on 22.01.2016, when the final hearing took place in the case, the OPs were not able to mention any probable date by which the possession could be delivered to the complainant.

 7.     The learned counsel for the complainants states on instructions that though in the other consumer complaints related to this project, this Commission has awarded higher compensation by way of interest, they, in order to avoid any further litigation in this matter, are restricting their claim to refund of the principal amount alongwith compensation in the form of simple interest @ 10% per annum in terms of clause 4.e of the Buyers Agreement since not even alternative plots were offered to the complainants.

8.      The complaints are therefore, disposed of with the following directions:

(a)     In CC No.11 of 2015, the opposite party shall refund the entire amount of Rs.1,29,70,026/- to the complainant alongwith compensation in the form of simple interest @ 10% per annum from the date of each payment till the date on which the entire amount paid by him alongwith compensation in the form of interest in terms of this order is actually refunded.

(b)     In CC No.208 of 2015, the opposite party shall refund the entire amount of Rs.1,06,64,128/- to the complainants alongwith compensation in the form of simple interest @ 10% per annum from the date of each payment till the date on which the entire amount paid by them alongwith compensation in the form of interest in terms of this order is actually refunded.

(c)     In CC No.605 of 2015, the opposite party shall refund the entire amount of Rs.1,50,10,993/- to the complainants alongwith compensation in the form of simple interest @ 10% per annum from the date of each payment till the date on which the entire amount paid by them alongwith compensation in the form of interest in terms of this order is actually refunded.

(d)     In CC No.1476 of 2015, the opposite party shall refund the entire amount of Rs.68,84,073/- to the complainant alongwith compensation in the form of simple interest @ 10% per annum from the date of each payment till the date on which the entire amount paid by him alongwith compensation in the form of interest in terms of this order is actually refunded.

(e)     In CC No.1477 of 2015, the opposite party shall refund the entire amount of Rs.96,92,814/- to the complainants alongwith compensation in the form of simple interest @ 10% per annum from the date of each payment till the date on which the entire amount paid by them alongwith compensation in the form of interest in terms of this order is actually refunded.

(f)      The opposite party shall pay Rs. 10,000/- as the cost of litigation in each complaint.

(g)     The payment in terms of this order shall be made within three months from today.