APPEARED AT THE TIME OF ARGUMENTS

For the Complainants            :       Ms. Aditi Subramaniam, Advocate

                                                       Ms. Sanuj Das Subramaniam, Advocate  

For the Opposite Party          :       None

ORDER

C.VISWANATH

1. Complainants desirous of acquiring a residential unit, approached the Opposite Party for a residential unit, apartment No. 401, 4^th Floor, Block B, Tower 4 at Unitech Vistas, Sector 70, Gurgaon, having super area of approx. 1545 sq. ft., at a sale consideration of Rs.59,65,463/-, exclusive of service tax and expenses  payable towards execution of the sale deed.  The Complainants were required to file an application form furnished by the executives of the Opposite Party, requesting the Opposite Party provisional allotment in the residential project and, pay such booking amount as was indicated to be necessarily paid at that stage. The Complainants signed the said application form dated 05^th March 2010 and paid a sum of Rs.4,79,375/-, inclusive of service tax, towards booking amount for provisional allotment of the residential unit. Pursuant thereto, the Complainants and the Opposite Party entered into an Apartment Allotment Agreement dated 10^th March 2010, whereby the Opposite Party agreed to sell and transfer the residential unit to the Complainants.  The Opposite Party issued an allotment letter in favour of the Complainants.  As per the buyer’s agreement, the Complainants were required to pay the balance amount of the consideration agreed between the Complainants and the Opposite Party as per the agreed payment plan, failing which, the Complainants were liable to pay interest calculated from due date of the outstanding amount for the period of delay, calculated @18% per annum, to be compounded annually.  The Opposite Party was required to offer possession of the Residential Unit within a  period of 36 months from the date of signing the agreement and upon execution and registration of Conveyance Deed in favour of the Complainants and pay the Complainants compensation calculated @Rs.5/- per square feet per month of the Super Area of the Residential Unit for the period of delay in offering possession.  If the Opposite Party was not in a position to offer the Residential unit, it was obligated to offer alternative property to the Complainants or refund the amount paid by the Complainants in full, with interest calculated @10% per annum from the date of payment(s) by the Complainants.  The Opposite Party was to execute a sale deed and cause it to be registered in favour of the Complainants after completion of construction of the Residential unit.

2. In accordance with the aforementioned payment plan proposed by the Opposite Party and agreed by the Complainants, the Complainants paid a sum of Rs.46,87,325/- inclusive of service tax, as part payment towards the agreed sale consideration of the residential unit. It was submitted that despite having proposed to deliver possession of the residential unit within 36 months of the date of signing the buyer’s agreement, the Opposite Party failed to complete the construction of the residential project, let alone deliver the possession of the residential unit to the Complainants.  The Opposite Party furnished no explanation of having failed to complete the construction and development of the residential project despite the Complainants having made available funds by making part payment towards agreed sale consideration of the residential unit. The Complainants submitted that no occasion or event, force majeure or otherwise, as stipulated under the buyer’s agreement, occurred to warrant any delay in commencement of construction, development, completion or offering for possession of the residential unit nor have the Complainants ever defaulted in meeting any obligation put forth by the Opposite Party upon the Complainants. It was submitted that the Opposite Party failed to develop the residential project till date.

3. The Opposite Party having received an amount of Rs.51,66700/- as part consideration towards the said residential unit, failed to commence construction of the said residential unit and offer its possession till date, despite having proposed to deliver the same within 36 months of the date of the Buyer’s Agreement. 

4. Alleging deficiency on the part of Opposite Party, Complainant  filed a Complaint before this Commission under Section 21 of the Consumer Protection Act, 1986, praying relief as under:-

• Issue summons/notices to the Opposite Parties to appear, produce file all original papers/documents concerning Unitech Sunbreeze, Sector-69, Gurgaon, Haryana.
• Hold the Opposite Party liable under deficiency in service within the meaning of the Act.
• Direct the Opposite Party to refund the principal amount of Rs.5166700/-, already paid by the Complainants in favour of the Opposite Party, along with 18% interest from the date of deposit of each payment till the date of filing the present Complaint.
•  Direct the Opposite Parties to pay a sum of Rs.5,00,000/- towards mental harassments and agony caused to the Complainants.  
• Direct the Opposite Parties to pay a sum of Rs.50,000/- as Cost of litigations to the Complainants.
• Direct that any further sum payable to the Opposite Party, shall be payable only pursuant to the Compensation and costs that Complainants is entitled to;
• Any other relief(s) that this Hon’ble Commission may grant in the facts and circumstances of the present case and in the interests of justice and equity.

5. The Complaint was contested by the Opposite Party by filing Written Statement in which it was stated that the agreement was entered on 10.05.2010 and the Complaint has been filed in May 2017.  As per Section 24A of the Consumer Protection Act 1986, complaint could have been filed only within a period of 2 years. Thus, the complaint is clearly time barred. The Complainants have nowhere shown sufficient cause which prevented them from filing the Complaint within the stipulated time. The Hon’ble Supreme Court in State Bank of India Vs. B.S. Agricultural Industries (2009) 5 SCC 121 held that Section 24-A is peremptory in nature and requires consumer forum to see before it admits the Complaint that it has been filed within  two years from the date of accrual of cause of action. The expression, ‘shall not admit a complaint; occurring in Section 24-A is sort of a legislative command to the consumer forum to examine on its own whether the complaint has been filed within the limitation period prescribed thereunder. The Hon’ble Supreme Court further held that it is the duty of the consumer forum to take notice of Section 24-A of the Act and give effect to it. If the complaint is barred by time and yet the consumer forum decided the complaint on merits, the forum would be committing an illegality and, therefore, the aggrieved party would be entitled to have such order set-aside.

6. The Complaint filed by the Complainant was not maintainable on the ground that the same was not within the pecuniary jurisdiction of this Commission. The Complainant admittedly paid a part sum of Rs.51,66,700/- only out of the total cost of Rs.59,65,463/- of the subject flat, apart from other necessary charges as per booking/offer of possession letter and interest as applicable which is much less than the relief claimed. The relief by no stretch of imagination can be to the magnitude of Rupees one Crore as allegedly prayed by the Complainant.  The value of the relief sought is totally uncorroborated and inflated only to bring the Complaint within the pecuniary jurisdiction of this Commission. As such the Complaint was liable to be dismissed at the threshold for want of pecuniary jurisdiction.  The present Complaint has been allegedly assessed for approximately Rupees One Crore, refund sum of Rs.51,66,700/- alongwith interest @18% p.a., compensation for delay as alleged, Rs.5,00,000/- being alleged for mental agony and hardship and Rs.50,000/- as alleged cost of these proceedings with the sole intention  to invoke jurisdiction of this Commission. The Complainants cannot by any stretch of imagination be more than one crore and the present Complaint deserves to be dismissed on this ground itself.

7. The Complainants having only secured allotment of Flat purely as an Investment measure for the “Commercial purpose”, are not   “Consumer” as envisaged under the provisions of Consumer Protection Act, 1986 as amended, as such cannot be a Complainant within the meaning of Section 2(1)(b) of the said Act.

8. The present case, though not maintainable, has been filed in this Commission to avoid payment of huge court fees, which the Complainants would have had to pay in the civil suit since the present case tantamounts to case for recovery of money/damages in the guise of consumer complaint. The present Complaint raises intricate and disputed questions of facts which require detailed and extensive evidence to be led by the parties. Hence, this Complaint is not maintainable.

9. It is important to mention that the Opposite Party, tried its level best to handover the possession of the said Flat, but due to reasons and circumstances beyond the control of Opposite Party, the project got delayed, as is inter-alai evident from the following:

(a)     The Project faced various roadblocks and hindrances including approvals from different authorities which were not in control of the Opposite Party, leading to unforeseeable delay in the construction/completion of the complex.

(b)     The real estate industry is a cyclical industry that is affected by both local and national economic conditions. While macroeconomic conditions affect the overall state of the real estate industry, local supply and demand conditions are most important factors affecting the real estate market. That the delay in completion and delivering possession is directly attributed to recession in economy as a result of which the availability of essential resources namely the labour and various raw materials became scarce.

(c)     further, the Common Wealth Games were organized in Delhi in October 2010. Due to this mega event, construction of several big projects, including the construction of Commonwealth Games village took place in 2009. This led to an extreme shortage of labour in the NCR region as most of the labour force got employed in said projects required for the Commonwealth Games. As a result, it became difficult for the Opposite Party to cope with the timelines set by it for completion of this Project. Such a situation was undoubtedly not foreseen by the Opposite Party. This resulted in delay of the Opposite Party’s scheduled construction.

(d)     in addition to the labour shortage, the Opposite Party faced extreme water shortage which was completely unforeseen by any of the Real Estate Opposite Party in the NCR region. Further, the Hon’ble Punjab and Haryana High Court, vide an order dated 16.07.2012, restrained the usage of groundwater and directed to use only treated water from available Sewerage Treatment Plants (hereinafter referred to as “STP”). As the availability of STP, basic infrastructure and availability of water from STP was very limited in comparison to the requirement of water in the ongoing constructions activities in Gurgaon District, it was becoming difficult to timely schedule the construction activities. The availability of treated water to be used at construction site was thus very limited and against the total requirement of water, only 10-15% of required quantity was available at construction sites. Later, to this effect, the Opposite Party received a Memo No. STP (g)/2012/-3374-3545 dated 05.12.2012 from the Department  of Town and Country Planning, Haryana, informing the Opposite Party about  the complete ban on the use of underground water for construction purposes and use of only recycled water was permitted, as per the directions of the Hon’ble High Court of Punjab and Haryana.

(e)     Further, the Ministry of Environment and Forest (hereinafter referred to as the “MOEF”) and the Ministry of Mines (hereinafter referred to as “MOM”)  had created  certain restrictions which resulted in a drastic reduction in the availability of bricks and availability of Kiln which is the most basic ingredient in the construction activity. The MOEF had published a Notification dated 14.09.1999 (hereinafter referred to as the “Notification”) which, amongst other restrictions barred the excavation of topsoil for the manufacture of bricks and further directed that no manufacturing of clay bricks or tiles or blocks be done within a radius of 50 kilometers from coal and lignite based thermal power plants without mixing at least  25% of ash with soil. The shortage of bricks in the region also affected the time schedule of construction.

(f)      Also the newspapers vigorously reported this issue highlighting the plight of construction activities in NCR Region due to directions of the Hon’ble Supreme Court which resulted into shutting down of various brick kilns.

(g)     Further, another raw material i.e. the sand which is used as mixture along with the cement was also not available in the vicinity of the Complex due to restrictions from Mining Department imposed in the entire Aravali region and the same had to be procured from neighboring State of Rajasthan.

(h)     in a completely unforeseeable ruling by the Hon’ble Supreme Court of India dated 08.05.2009, the Hon’ble Court suspended all the mining Operations in the Aravalli Hill range falling in State of Haryana within the area of approx.. 448 sq. kms. In the district of Faridabad and Gurgaon including Mewat which directly affected the construction schedules and activities of the Opposite Party herein.

(i)      thus the reduced availability and supply of the raw materials which were essential and important ingredients for the construction activities hampered the construction and led to delay.

(j)      in addition to the acute shortage of labour, underground water and the raw materials i.e. brick and sand, the complex faced hurdles in the form of delayed approvals/sanctions from the Government Authorities  and agencies. For instance, it took a long time for the concerned Authority to give the environmental clearances. Such type of delays were never envisaged or anticipated by the Opposite Party.

(k)     Further, the Ministry of Environment and Forest (hereinafter referred to as the “MOEF”) had created certain restrictions and prohibitions on new projects  or activities, or on the expansion or modernization of existing projects or activities based on their potential environmental impacts as indicated in the schedule to the notification, being undertaken in any part of India, unless prior environmental clearance has been accorded in accordance with the objectives of National Environment Policy was approved by the Union Cabinet on 18^th May  2006 and the procedure specified in the notification, by the Central Government  or the State or Union Territory Level Environment Impact Assessment Authority (SEIAA), to be constituted by the Central Government in consultation with the State Government or the Union territory  Administration concerned under sub-section (3) of Section 3 of the Environment (Protection) Act, 1986  for the purpose of this notification, was published in the Gazette of India, Extraordinary, Part II, Section 3, sub-section (ii) vide number S.O. 1324 (E) dated  the 15^th September  2005 inviting objections and suggestions from all persons likely to be affected thereby within a period of 60 days from the date on which copies of Gazette containing the said notification were made available to the public.

10. It is a settled principle of law that a party who has suffered the loss shall only be entitled for damages of such breach, which has been enumerated or provided in the Contract itself. As per Clause 4c(ii) of the Buyer’s Agreement, in case of any delay on the part of the Opposite Party, the Complainant is entitled to be compensated at the rate of Rs.5/- per sq. ft. per month of the Super Area for the period of delay in offering the possession, therefore the present Claim demanded by the Complainant herein is clearly inflated and illegal and the present Complaint should be dismissed on this ground alone. Further, it is pertinent to note that the Hon’ble Supreme Court in catena of judgements has held that terms of the contract should be followed and abided by the parties.  A few judgements with their relevant paragraphs have been reproduced as under:-

a. Bharathi Knitting Company v. DHL Worldwide Express Courier Division of Airfreight Ltd. reported in AIR 1996 SC 2508

“we are of the opinion that the National Commission was right in limiting the liability undertaken in the contract entered into by the parties and in awarding the amount of deficiency in service to the extent of the liability undertaken by the respondent”.

b. Sir Chunilal V Mehta and Sons Ltd. v. the century Spinning and Manufacturing Co. Ltd. reported in AIR 1962 SC  1314

“where the parties have deliberately specified the amount of liquidated damages there can be no presumption that they, at the same time, intended to allow the party who has suffered by the breach to give a go-by the sum specified and claim instead a sum of money which was not ascertained or ascertainable at the date of breach”.

c. Fateh Chand v. Balkishan Dass reported in AIR 1963SC1405

 “The measure of damages in the case of breach of a stipulation by way of penalty is by Section 74 reasonable compensation not exceeding the penalty stipulated for. In assessing damages the court has, subject to the limit of the penalty stipulated, jurisdiction to award such compensation as it deems reasonable  having regard to  all the circumstances of the case. Jurisdiction of the Court to award compensation in case of breach of contract is unqualified except as to the maximum stipulated; but compensation has to be reasonable, and that imposes upon the Court duty to award compensation according to settled principles”.   

11. Heard the Learned Counsel of the Complainant.  None was present for the Opposite Party. Also carefully perused the record and evidence placed before us.

12. A Buyer’s Agreement was executed between the Opposite Party and Complainants with respect to the Flat at VISTAS Second Floor, 401, Tower No. 02, Sector-70, Golf Course, Extension Road, Gurgaon, Haryana having super area of 1545 sq. ft. at a sale consideration of Rs.59,65,463/-.  As per the agreement the possession of the residential unit was to be given in 36 months, i.e., by March 2013, but the possession had not been offered, despite payment of Rs.51,66,700/-.  The Complainants, therefore, sought refund of the amount, alongwith compensation and litigation cost. 

13. The Opposite Party contested the complaint as being barred by limitation prescribed under section 24(a) of the Consumer Protection Act, 1986 since the last date stipulated in the buyers’ agreement for giving possession of the flat expired more than 2 years ago.  It is a settled legal proposition that failure to give possession of flat is continuous wrong and constitutes a recurrent cause of action and as long as the possession is not delivered to the buyers, they have every cause, grievance and right to approach the consumer courts.  It is only when the seller virtually refused to give possession, that the period of limitation prescribed under section 24(A) of the Consumer Protection Act, 1986 would start.  The Complainant has to file a case within two years from the date of refusal of delivery of possession to the buyer.  In the present case, the Opposite Party has not refused possession of the flat to the complainants at any point of time.  Therefore, the cause of action continues to subsist in favour of the Complainant. 

14. It was contended by the Opposite Party that since the cost of the flat was less than Rupees one crore, this Commission lacked pecuniary jurisdiction to entertain the complaint. The contention of the learned counsel for the Opposite Party was that interest claimed by the complainants cannot be termed as compensation and if the interest component is excluded, the pecuniary value of the complaint does not exceed Rs.1,00,00,000/-.  In our view, the interest claimed by the flat buyers in such a case represents not only the interest on the capital borrowed or contributed by them, but also includes compensation on account of appreciation in the land value and increase in the cost of construction, apart from loss of opportunity to acquire a residential flat at a particular price. The cost of the flat alongwith interest claimed comes within the pecuniary jurisdiction of this Commission.

15. Another contention of the Opposite Party was that the purchase of the residential unit was for commercial purpose and the complainants were not consumers within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1986.  The expression commercial purpose used in Section 2(1)(d) of the Act came up for consideration of this Commission in Kavita Ahuja Vs. Shipra Estates Ltd., CC 137 of 2010 decided on 12-02-2015 and the following view was taken:

“The expression ‘commercial purpose’ has not been defined in the Act and  therefore, as held herein below  by the Hon’ble Supreme Court in Laxmi Engineering Works Vs. P.S.G. Industrial Institute (1995) 3 SCC 583, we have to go by the dictionary meanings,

 “In the absence of a definition, we have to go by its ordinary meaning ‘Commercial’ denotes “pertaining to commerce” (Chamber’s Twentieth Century Dictionary); it means “connected with, or engaged in commerce; mercantile, having profit as the main aim” (Collins English Dictionary) whereas the word ‘commerce’ means “financial transactions especially buying and selling of merchandise on a large scale” (Concise Oxford Dictionary)”.

6.  Going by the Dictionary meaning of the expression ‘Commerce’ as far as hiring or availing services are concerned, a person can be said to have hired or availed services only if they are connected or related to the business or commerce in which he is engaged.  In other words, the services in order to exclude the hirer from the ambit of Section 2(1)(d) of the Act should be availed for the purpose of promoting, advancing or augmenting an activity, the primary aim of which is to earn profit with use of the said services.  It would ordinarily include activities such as manufacturing, trading or rendering services.  In the case of the purchase of houses which the service provider undertakes to construct for the purchaser, the purchase can be said to be for a commercial purpose only where it is shown that the purchaser is engaged in the business of purchasing and selling houses and / or plots on a regular basis, solely with a view to make profit by sale of such houses.  If however, a house to be constructed by the service provider is purchased by him purely as an investment and he is not undertaking the trading of houses on a regular basis and in the normal course of the business profession or services in which he is engaged, it would be difficult to say that he had purchased houses for a commercial purpose.  A person having surplus funds available with him would not like to keep such funds idle and would seek to invest them in such a manner that he gets maximum returns on his investment.  He may invest such funds in a Bank Deposits, Shares, Mutual Funds and Bonds or Debentures etc.  Likewise, he may also invest his surplus funds in purchase of one or more houses, which is/are proposed to be constructed by the service provider, in the hope that he would get better return on his investment by selling the said house(s) on a future date when the market value of such house (s) is higher than the price paid or agreed to be paid by him.  That by itself would not mean that he was engaged in the commerce or business of purchasing and selling the house (s).

7. Generating profit by way of trading, in my view is altogether different from earning capital gains on account of appreciation in the market value of the property unless it is shown that the person acquiring the property was engaged in such acquisition on a regular basis and it was by way of a business activity.”

16. The Complainants are senior citizens.  Complainant No. 1 is a retired Professor and Complainant No. 2 is a homemaker.  No evidence, whatsoever has been adduced to show that they are involved in any commercial activity.  There is no merit in the contention of the Opposite Party that they are not consumers as per the Consumer Protection Act, 1986.  It is just another routine, technical objection raised in the reply. 

17. The Opposite Party details certain circumstances which led to the delay in the project like roadblocks in seeking approvals, slow-down of the economy, commonwealth games leading to shortage of labour, water shortage and raw-material shortage among others.  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 was no evidence of any lock-out or strike by the labour 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.  This contention of the Opposite Party, therefore, has no substance.

18. The Opposite Party had also submitted that it was agreed between the parties in the buyers’ agreement that in case of delay in possession, the purchaser would be entitled to a compensation of Rs.5/- per sq. ft. by way of adjustment at the time of final possession.  Therefore, the complainants are bound by the terms and conditions of the agreement and cannot claim any excess amount from the Opposite Party.  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 our view will not be final and binding if it is shown that the consent to the said term was not really voluntary, if the person giving consent had no other choice.  Payment of a nominal compensation such as Rs.5/- per square feet of the super area has become the order of the day in contracts designed by big builders and a person seeking to buy an apartment is left with no option but to sign on the dotted lines, since the rejection of such a term by him would mean cancellation of the allotment.  No reasonable person would volunteer to accept compensation constituting about 2-3% of his investment in case of delay on the part of the builder, when he is made to pay compound interest @18% p.a. for delay on his part in making payment.  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 delay on the part of the buyer in making delayed 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. 

19. The Opposite Party builder failed to fulfil its contractual obligation of delivering the possession of the flat to the complainant within the time stipulated in the agreement, or within a reasonable time thereafter. The respondent flat purchaser could not be compelled to take possession of the flat, after expiry of more than 4 years. In these circumstances, the respondent flat purchaser was entitled for the relief prayed i.e. refund of the entire amount deposited alongwith compensation.

20. The Complainants have claimed compounded interest @18% p.a. which was the rate which they were to pay to the Builder in the event of their default in making timely payment.  However, the Complainants would be entitled only to compensation commensurate with financial loss actually suffered by them on account of the delay on the part of the OP in handing over the possession of the apartments, apart from compensation.  They cannot make a windfall gain over and above the actual loss suffered by them.  It would be reasonable, just and fair to refund the amount paid by the Complainants and compensation in the form of interest @10% p.a.

21. In view of above, we direct the Opposite Party to refund the amount of Rs.51,66,700/- paid by the Complainants alongwith compensation in the form of simple rate of interest @10% p.a. with effect from the respective date of each payment, till the date of refund with compensation.  The Opposite Party shall also pay Rs.25,000/- towards cost of litigation to the Complainants.  Payment in terms of this order shall be made within three months from today.