JUSTICE V.K. JAIN, (ORAL)       

IA/4684/2019 (Early hearing)

This is an application for preponment of hearing. I find that this matter was listed for final hearing firstly on 17.8.2018 and then on 15.11.2018. Since the Bench did not assemble on both these dates, the matter could not be heard. The application is, therefore, allowed and the complaint is taken up for final hearing today.

CC/1353/2017

The complainants, namely, Jaya Vij and Pooja Khanna booked a residential flat with the opposite party in a project namely ‘Vistas’ which the opposite party was to develop in Sector-70 of Gurgaon. Apartment No. 0903 (Customer ID VS1214) in Tower - 02 of the aforesaid project was allotted to the complainants for a consideration of Rs.72,77,480/-.  They then executed an Apartment allotment Agreement dated 16.10.2010 with the opposite party. As per Clause 4.a(i) of the said Agreement, the possession was to be delivered within thirty six months of signing of the agreement, meaning thereby that the possession ought to have been delivered by 16.10.2013.  The grievance of the complainants is that the possession has not even been offered to them despite they having paid Rs.29,07,023/- to the opposite party. The complainants are, therefore, before this Commission seeking refund of the said amount along with compensation etc.

2.      The OP has filed its written version contesting the complaint but has not filed any affidavit by way of evidence. I have heard the learned counsel for the parties and have considered the evidence filed by the complainants. In the written version filed by the opposite party, they have not disputed the allotment made to the complainants nor have they disputed the amount received from them. In fact, the payment received from the complainants has been expressly admitted in the written version filed by the opposite party.

3.      The learned counsel for the complainants states that several other consumer complaints pertaining to allotments made in this project have already been allowed by this Commission after rejecting the grounds on which the said complaints were contested. A reference in this regard is made to CC/810/2017 – Santosh Goyal Vs. Unitech Ltd. decided on 19.1.2018 including CC/1191/2015 -  Vishal Mehta & Ors. Vs. M/s. Unitech Limited decided on 19.7.2017, CC/427/2014 - Satish Kumar Pandey Vs. M/s. Unitech Ltd. & Anr. and connected matters, decided on 8.6.2015 and CC/548/2014 - Koshika Agarwal Vs. M/s. Unitech Limited & connected matters decided on 31.10.2017.  Since all those grounds have already been rejected by this Commission, the said grounds need not be examined afresh in this complaint.

5.      The order passed by this Commission in Satish Kumar Pandey & Anr. (supra) to the extent it is relevant, reads 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 be 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.

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.

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.      The learned counsel for the complainants states on instructions that the complainants are restricting their claim to the refund of the principal amount paid by them to the opposite party along with compensation in the form of simple interest @ 10% p.a. in terms of Clause 4.e of the Agreement.

7.      For the reasons stated hereinabove,  the complaint is disposed of with the following directions:-

(i)      The opposite party shall refund the principal amount of Rs.29,07,023/- to the complainants along with compensation in the form of simple interest @ 10% per annum from the date of each payment till the date of refund with compensation.

(ii)       The opposite party shall pay Rs.25,000/- as cost of litigation to the complainants.

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