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

The complainant Rishi Kapur booked a residential apartment with the OP in a project namely ‘Ivy Terraces, Wildflower Country’, which the OP was to develop in Sector-70 of Gurgaon.  Vide allotment letter dated 02.04.2014, Unit No.0046 in the above referred project was allotted to the complainant for a consideration of Rs.1,40,13,622/-. The parties then executed a Sale Agreement on 17.04.2014, incorporating their respective obligations in respect of the allotment made to the complainant.  As per Clause 4(i)(a) of the agreement, final notice calling upon the allottee to take possession was to be issued within a period of 42 months from the date of execution of the agreement.  The possession therefore, ought to have been offered by 17.10.2017 when 42 months from the date of the agreement expired.  The possession having not been offered to him despite he having already paid Rs.46,95,660/- to the OP, the complainant is before this Commission. 

2.      The written version was filed by the OP contesting the Consumer Complaint on several grounds.  However, no affidavit by way of evidence has been filed by the OP and its right to file the said affidavit was closed vide order dated 13.08.2019. 

3.      I have heard the learned counsel for the complainant.  No one is present for the OP when the matter is called. 

4.      The complaint has been resisted by the opposite party primarily on the following grounds: -

(i)      There was shortage of labour in Delhi and NCR on account of Commonwealth Games organized in October, 2010.

(ii)      Due to implementation of social schemes such as NREGA and JNNURM, there was a sudden shortage of labour/workforce in the market.

(iii)     There was shortage of water in NCR.

(iv)    The usage of ground water for construction purposes was prohibited by Punjab & Haryana High Court. 

(v)     Ministry of Environment & Forest had issued a notification dated 14.09.1999 barring excavation of soil for manufacture of bricks and stopping manufacturing of bricks with a radius of 50 Kms from Thermal Power Station without mixing at least 25% of ash with soil.

(vi)    Sand was not available in the market and had to be procured from neighboring state since mining operation had been sustained by the Hon’ble Supreme Court vide order dated 08.05.2009.       

          It is also stated in the written version of the OP that in the event of delay in offer of possession, the complainant is entitled to compensation at the rate of Rs.5 per sq.ft. per month of the saleable area in terms of Clause 4(b) of the Agreement.

5.      All the grounds, on which the Consumer Complaint has been contested by the developer, have already been considered and repeatedly rejected by this Commission in a large number of Consumer Complaints decided against it.  A reference in this regard can be made to the decision of this Commission in Pradeep Kumar Vs. Unitech Limited, Consumer Complaint No. 530 of 2017, decided on 20.11.2019, which to the extent it is relevant reads as under:-

“6. The next question which arises for consideration is the quantum of compensation which should be paid to the complainants for the delay in completion of the villas. As far as the prohibition on use of underground water in construction is concerned, the learned counsel for the complainant has drawn my attention to the order dated 21.08.2012 passed by a Divisional Bench of Punjab & Haryana High Court in Civil Writ Petition No. 20032 of 2008 wherein the High Court noted that the public notice issued under Section-5(3) of the Environment Protection Act, 1986 was published in the newspaper on 26.12.2000. It further shows that the said notice had imposed a complete ban upon the use of underground water in the construction without prior approval of the competent authority. It was noted by the High Court that despite publication of the aforesaid notice, the builders continued to use underground water for construction purposes. If there was a complete ban on use of underground water for construction and the said prohibition was notified on 26.12.2000, the opposite party must have taken into account, the impact of the said prohibition while entering into Buyers Agreements with the complainants. Therefore, it is not open to the opposite party to rely upon the said prohibition in order to justify the delay in construction of the villas sold to the complainants. The opposite party knew at the time of entering into agreements with the complainants that it will not be able to use underground water for construction of the villas and therefore, will have to make alternative arrangements from authorized sources for making the water available for the said construction. Therefore, the aforesaid prohibition on use of the underground water for construction purpose does not justify the delay in completion of the construction. In any case, no material has been placed by the opposite party on record to show that efforts were made by it during the relevant period to procure water from alternative sources but it was unable to obtain the water from the said sources. More importantly, in the Buyers Agreement executed between the parties, it was not disclosed to the buyers that since no underground water can be used for construction purpose, the developer will have to arrange water from alternative sources and in case it is not able to arrange water, the construction would be delayed and in that case, it will not be held responsible for the delay in completion of the construction.”

 7.      As regards the alleged shortage of labour and building material on account of Commonwealth Games, the plea taken by the opposite party is wholly misplaced since the said games were over in October 2010 much before the allotment in this project was made to the complainants.

8.      As regards the alleged economic slowdown and consequent recession in the real estate market, the same cannot be a valid ground for delaying the possession of the flats to the  complainants since some of the buyers made advance payment of almost 95% of the sale consideration whereas the other buyers were to make payment linked with the progress of construction and this is not the case of the opposite party  that they had defaulted in performing their contractual obligations as regards the payment of the sale consideration. Therefore, it cannot be said, as far as this project is concerned, that the construction was delayed on account of funds not being available with the opposite party.

9.      As regards the alleged shortage of labour due to NREGS and Jawahar Lal Nehru National Urban Renewal Mission, there is no evidence of the opposite party having attempted to recruit labour and having not found the requisite labour available in the market. Ordinarily such big builders operate by giving contracts/sub-contracts to third parties. There is no evidence of the opposite party having not been able to get any contractor/sub-contractor on account of non-availability of labour and/or building material in the market. Moreover, this is not the case of the opposite party that no construction activity took place in Gurgaon in the last 5 years or so. Had the labour and/or building material not been available in the market, the problem would have been faced not only by the opposite party but by all other builders as well as the individuals who were seeking to construct houses in this area. Therefore, I find no merit in the aforesaid plea taken by the opposite party.

11.    As regards the alleged shortage of bricks and sand, there is no evidence of the opposite party having invited tenders for supply of bricks and sand and the said material having not been available in the market. Moreover, there is no evidence of any sub-contractor/contractor of the opposite party having stopped the work awarded to him on account of non-availability of labour and/or building material in the market. It is possible that the wages of the labour and the cost of the building material may have gone up with the passage of time but it would be difficult to accept that neither the required labor nor the building material in sufficient quantity was available in the open market.”

6.      Moreover, in the present case the allotment was made on 02.04.2014 whereas Commonwealth Games were held in October, 2010. Therefore, any shortage whether of material or of labour on account of Commonwealth Games could not have affected the construction of the flat which the opposite party had allotted to the complainant.

7.      Even otherwise, no evidence has been led by the opposite party to prove the alleged shortage of construction material and labour in the market.

8.      As far as Clause 4(b) of the Agreement is concerned, such clauses have consistently been held to be unfair and unenforceable. A reference in this regard can be made to the decision of the Hon’ble Supreme Court in Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan (2019) 5 SCC 725 which to the extent it is relevant, reads as under:

“6.4. A perusal of the Apartment Buyer’s Agreement dated 08.05.2012 reveals stark incongruities between the remedies available to both the parties.

For instance, Clause 6.4 (ii) of the Agreement entitles the Appellant – Builder to charge Interest @18% p.a. on account of any delay in payment of installments from the Respondent – Flat Purchaser.

Clause 6.4 (iii) of the Agreement entitles the Appellant – Builder to cancel the allotment and terminate the Agreement, if any installment remains in arrears for more than 30 days.  

On the other hand, as per Clause 11.5 of the Agreement, if the Appellant – Builder fails to deliver possession of the apartment within the stipulated period, the Respondent – Flat Purchaser has to wait for a period of 12 months after the end of the grace period, before serving a Termination Notice of 90 days on the Appellant – Builder, and even thereafter, the Appellant – Builder gets 90 days to refund only the actual installment paid by the Respondent – Flat Purchaser, after adjusting the taxes paid, interest and penalty on delayed payments. In case of any delay thereafter, the Appellant – Builder is liable to pay Interest @ 9% p.a. only.

 6.5. Another instance is Clause 23.4 of the Agreement which entitles the Appellant – Builder to serve a Termination Notice upon the Respondent – Flat Purchaser for breach of any contractual obligation. If the Respondent – Flat Purchaser fails to rectify the default within 30 days of the Termination Notice, then the Agreement automatically stands cancelled, and the Appellant – Builder has the right to forfeit the entire amount of Earnest Money towards liquidated damages.

 On the other hand, as Clause 11.5 (v) of the Agreement, if the Respondent – Flat Purchaser fails to exercise his right of termination within the time limit provided in Clause 11.5, then he shall not be entitled to terminate the Agreement thereafter, and shall be bound by the provisions of the Agreement.

 6.6. Section 2 (r) of the Consumer Protection Act, 1986 defines ‘unfair trade practices’ in the following words :

 “‘unfair trade practice’ means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice …”, and includes any of the practices enumerated therein. The provision is illustrative, and not exhaustive.

 6.7. A term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder.

 The contractual terms of the Agreement dated 08.05.2012 are ex-facie one-sided, unfair, and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2 (r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the Builder.”

9.      For the reasons stated hereinabove, I hold that the OP has failed to give any justification for the abnormal delay in offer of possession to the complainants.  Consequently, the complainant is entitled to refund of the amount which they paid to the OP alongwith appropriate compensation. The complaint is therefore, disposed of with the following directions:-

(i)      The opposite party shall refund the entire principal amount of Rs.46,95,660/- to the complainant alongwith compensation in the form of simple interest @ 10% per annum with effect from the date of each payment till the date of full refund. 

(ii)      The OP shall also pay a sum of Rs.25,000/- as the cost of litigation to the complainant.

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