Chandigarh

StateCommission

CC/53/2023

DR RENUKA SHARMA - Complainant(s)

Versus

OMAXE CHANDIGARH EXTENSION DEVELOPERS PVT. LTD. - Opp.Party(s)

KARAN SINGLA

20 Dec 2023

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

 

Complaint No.	:	53 of 2023
Date of Institution	:	05.07.2023
Date of Decision	:	20.12.2023

 

1]      Dr. Renuka Sharma, aged about 49 years w/o Dr. Ratti Ram Sharma R/o House No.76, Sector 24-A, Chandigarh – 160023.

2]      Dr. Ratti Ram Sharma, aged about 54 years S/o Late Sh. P. D. Sharma, R/o House No.76, Sector 24-A, Chandigarh – 160023

….Complainants.

Versus

M/s Omaxe Chandigarh Extension Developers Private Limited, Regional Office: SCO 143-144, Sector 8-C, Madhya Marg, Chandigarh – 160008 through its Managing Director.

2^nd Address:-

Registered Office: Omaxe City, 111^th Mile Stone Near Bad Ke Balaji Bus Stand, Jaipur-Ajmer Expressway, Jaipur – 302026 through its Managing Director.

3^rd Address:-

Zonal Office: India Trade Tower, 1^st Floor, Baddi-Kurali Road, New Chandigarh, Mullanpur, District S.A.S. Nagar, Mohali, Punjab-140901.

…..Opposite Party.

 

BEFORE:

JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT MR.RAJESH K. ARYA, MEMBER

Argued by :-­

                    

Sh. Ravi Kumar Mishra, Advocate proxy for Sh. Karan Singla, Advocate for the complainants.   

Sh. Arjun Sharma, Advocate for the opposite party (on VC).

 

PER  RAJESH  K. ARYA, MEMBER

 

Brief facts:-

                   This complaint has been filed by the complainants, seeking possession of unit bearing no.TLC/CAPSEAN-E/TWELFTH-A/12A02, measuring 1920 square feet, purchased by them from the opposite party, in its project named - “The Lake”, New Chandigarh, Mullanpur, Punjab,  total sale consideration whereof was fixed at Rs.82,05,600/-. Alongwith possession, relief of payment of delayed compensation for the period of delay, compensation for mental agony etc. has also been sought by the complainants. It has been stated that the opposite party had assured that the possession would be offered within 42 months/3½ years i.e. by 06.09.2018 from the date of booking i.e. 06.09.2014 but there was no sign at site to meet the deadline when the complainants visited the site in March 2017. It has further been stated that the opposite party has failed to keep the pace with construction of the said project and did not raise any further demand after August 2019 for about four years. It has further been stated that the complainants have already paid an amount of Rs.68,81,482/- for the period from 06.09.2014 to 08.08.2019 but the opposite party has failed to handover the possession of the flat even after lapse of more than 8 years and 9 months from 06.09.2014 to 31.05.2023 or till date. It has further been stated that there is no sign of completion of project with all promised facilities like club, parking, power backup etc. with occupancy and completion certificate from competent authority and there is no hope of offering possession with occupancy and completion certificate from competent authority. It has further been stated that the complainants have already paid interest of Rs.18,53,078/- from 28.12.2016 to 31.05.2023 on home loan of about 40 Lakhs for the last 6 ½ years in adition to loss of enjoyment and interest. Alleging non-delivery of timely possession of the flat in question and compensation for delay and suffering harassment and metal agony on this account, as deficiency in rendering service and unfair trade practice on the part of the opposite party, this complaint has been filed.

Reply of the opposite party:-

1.                 The opposite party in its written reply, while admitting factual matrix of the case with regard to sale and allotment of the unit in question to the complainants in the project in question; payments made by them as mentioned in the complaint etc. took various objections/pleas as under:-
   1. that as per clause 40(a) of the allotment letter dated 05.10.2016, it was also clearly brought to the notice of the complainants that the opposite party shall try to complete the development/construction of the unit/project within a period of 42 months from the date of signing of the allotment letter or approval of the building plans, whichever is later and within such further extended grace period of 6 (six) months and the period of 48 months of delivery of possession as mentioned in the agreement is excluding of Saturdays, Sundays and Govt. Holidays;
   2. that the date of possession as per the allotment letter was 05.10.2020 counting 48 months from the date of the allotment letter and not from the date as claimed by the complainants.
   3. that as per clause 40(a) of the allotment letter/agreement, it was clearly agreed to between the parties that the period of delivery of possession was subject to force majeure circumstances;
   4. that delay in offering possession of the unit took place because of the force majeure circumstances having been faced by the opposite parties due to COVID-19, as a result whereof the Government of India issued various advisories, giving relief to the builders by extending the dates for completion of the projects;
   5. that even otherwise, payment of compensation, if any, for delay in offering possession is to the extent of Rs.5/- per sq. feet, of built-up area of the unit, as per clause 41(g) of the allotment letter/agreement, which shall be adjustable at the time of execution of conveyance deeds;
   6. that the parties are bound by terms and conditions of the allotment letter/agreement and the Courts have no power to amend the same;
   7. that the complainants being investors do not fall within the definition of consumer;
   8. that in the face of existence of arbitration Clause 61 in the allotment letter, this Commission is having no jurisdiction to decide this complaint;
   9. that the complaint is bad for non-joinder of Managing Director as necessary party because there is no such position in the company and the Managing Director/ Directors being the agents of the Company in their fiduciary duty cannot be personally held liable in the matter;

While denying the rest of the averments made in the complaint, the opposite party prayed for dismissal of the complaint with exemplary costs.

•  
•                 In the rejoinder filed, the complainants reiterated all the averments contained in the complaint and controverted those contained in written reply of the opposite party.
•                 The parties led evidence, in support of their case and also filed written arguments.
•                 We have heard the Counsel for the parties and have gone through the evidence and record of this case, including the written arguments, very carefully.

 

Whether the complainants are consumer or not?

1.                 First coming to the objection taken by the opposite party to the effect that the complainants do not fall within the definition of ‘consumer’, it is significant to mention here that the opposite party has failed to place on record any cogent and convincing evidence in support of this objection. To prove the objection that the unit in question has been purchased by the complainants to indulge in ‘purchase and sale of units’ i.e. for earning profits, the onus lays upon the opposite party but it failed to do so. Thus, because in the present case, the opposite party failed to discharge its  onus, especially, when still the complainants are seeking possession of their unit, hence, we hold that they fall under the definition of consumer as defined under the Act. Our this view is supported by the observations made by the Hon’ble National  Commission in Kavit Ahuja vs. Shipra Estates, I (2016) CPJ 31. As such, objection taken in this regard stands rejected.

 

Whether existence of Arbitration clause in the allotment letter bars the jurisdiction of Consumer Fora?

 

1.                 Now coming to the objection taken with regard to Arbitration is concerned, it may be stated here that this issue has already been set at rest by the larger Bench of the Hon’ble National Commission in Aftab Singh  Vs. Emaar MGF Land Limited & Anr., Consumer Case No. 701 of 2015, wherein, vide order dated 13.07.2017, it has been held that an Arbitration Clause in the Agreements/contracts between the buyer and the Builder cannot circumscribe the jurisdiction of a Consumer Fora notwithstanding the amendments made to Section 8 of the Arbitration Act. Civil appeal bearing No.23512-23513 of 2017 and  Review Petition (C) Nos.2629-2630 of 2018 filed by the builder, before the Hon’ble Supreme Court of India, also stood dismissed vide orders dated 13.02.2018 and 10.12.2018 respectively. As such, objection taken in this regard also stands rejected.

Whether complaint is bad for non-joinder of Managing Director as necessary party?

 

8]                As far as objection taken to the effect that the complaint is bad for non-joinder of Managing Director as necessary party because there is no such position in the company and the Managing Director/Directors being the agents of the Company in their fiduciary duty cannot be personally held liable in the matter, it may be stated here that the Officers like CEO, Managing Director and Directors are holding such important positions in the Company (a juristic person), where they are directly involved with the decision-making process and will be jointly and severally liable alongwith the Company, for all its  acts done. Similar view was taken by the Hon’ble National Commission, in a case titled as M/s. India Bulls Real Estate & Wholesale Services Ltd. & Ors, Vs. Vemparala Srikant & Anr., First Appeal No. 797 of 2017, decided on 16 Aug 2017. As such, objection taken in this regard stands rejected.

 

Observations/findings of this Commission.

1.                 Bare perusal of record transpires that an amount of Rs.57,82,313/- for the period from 06.09.2014 to 06.03.2018 stood paid by the complainants to the opposite party towards purchase of the unit in question, possession whereof was to be delivered within total period of 48 months from the date of  execution of allotment letter i.e. by 05.10.2020 (48 months i.e. 42 months plus 6 months grace period from the date of execution of allotment letter, as per clause 40(a)  thereof i.e. date of execution of allotment letter being 05.10.2016). It is an undisputed fact that possession of the unit in question has not been offered by 05.10.2020 or even thereafter and till date, the complainants are empty handed. To wriggle out of the situation, the opposite party has taken shelter under the force majeure circumstances that due to COVID-19 lockdown was announced on 15.03.2020 in the country; that the Government of India issued various advisories, giving relief to the builders by extending the dates for completion of the ongoing projects; and that the competent authorities have extended the period for completion of the project in question.
2.               Under above circumstances, the moot question which falls for consideration is, as to whether, the opposite party can claim any immunity for delay in offering possession of the unit in question, on the grounds mentioned above. It may be stated here that admittedly lockdown in the country was announced on 25.03.2020, which was lifted in April 2020. At the same time, we also cannot ignore the fact that the Government of India, Ministry of Housing and Urban Affairs, Housing Section, vide office memorandum dated 13.05.2020 (Annexure OP/3) had extended the registration and completion date or revised complettion date or extended completion dates by 6 months due to outbreak of COVID-19, which was extendable up-to further 3 months i.e. total 9 months. Thus, in our considered opinion, the opposite party is entitled to get immunity of these 9 months from the actual date of offering possession of the respective unit to the complainants i.e. possession should have been delivered to the complainants latest by 05.07.2021 (09 months from 05.10.2020). However, it is coming out from the record that even by the said date (05.07.2021) also, possession of the unit has not been offered to the complainants and there has been delay in the matter, which is continuing, because even the date when arguments were heard in this case, it was not offered. Thus, in our considered opinion, by not offering and delivering possession of the unit in question by the promised date or even with the extended period of 9 months due to COVID-19, referred to above, the opposite party is deficient in providing service and guilty of adoption of unfair trade practice.  
3.               At the time of arguments, it was also argued by counsel for the opposite party that, as per terms and conditions of the Allotment Letter, when computing the period of delivery of possession of the unit, Sundays, Saturdays, Bank Holidays, etc. are to be ignored. It is significant to mention here that similar issue has been dealt with by this Commission in a case titled as Sudesh Rani Vs. Omaxe Chandigarh Extension Developers Pvt. Ltd. and another, Consumer Case No.178 of 2016, decided on 16.08.2016 and many other cases, thereafter and it was specifically held that when there is no convincing explanation of getting extension of 6 months' period to deliver possession beyond the stipulated date or even after the extended period, referred to above, the benefit of exclusion of Saturdays, Sundays, Bank Holidays etc. cannot be given. However, even otherwise, in the present case, the opposite party is being granted benefit of 6 months of grace period and also the immunity of 9 months, referred to above. In view of above, the plea of the opposite party in this regard stands rejected.
4.               It may be stated here that it is settled law that onus to prove the stage and status of construction and development work at the project site and that all the permissions/approvals have been obtained in respect thereof, is on the builder/developer. It was so said by the Hon’ble National Commission, in Emaar MGF Land Limited and another Vs. Krishan Chander Chandna, First Appeal No.873 of 2013 decided on 29.09.2014. In the present cases, not an iota of evidence has been placed on record, as to at what stage, the development and construction stage has reached. In case, the development/construction activities at the project is about to complete, even by this year-2023, then it was for the opposite party, which could be said to be in possession of the best evidence, to produce cogent and convincing documentary evidence, in the shape of the reports and affidavits of the Engineers/Architects, as they could be said to be the best persons, to testify, as to whether, all these development/construction activities, are being undertaken but they failed to do so.  Under these circumstances, the opposite party has attracted an adverse inference in the matter to hold that the opposite party is not serious in completing the project and on the other hand is utilizing the amount paid by the complainants and other similar located allottees, without providing them anything. Thus, in our considered view, the complainants are entitled to get possession of their unit, alongwith delayed compensation for the period of delay in delivery of possession.

 

What amount of compensation should be granted to the complainants, for the period of delay in delivery of possession of their unit?

 

1.               Now, we will like to decide as to what amount of compensation should be granted to the complainants, for the period of delay in delivery of possession of their unit. On account of delay in actual delivery of possession of the unit to the complainants, they have suffered mental agony, hardships and financial loss. In the case titled as Lucknow Development Authority v. M K Gupta (1994) 1 SCC 243, the Hon’ble Supreme Court discussed about the extent of the jurisdiction of the Consumer Fora to award just and reasonable compensation for the harassment and agony suffered by a consumer. Though, counsel for the opposite party contended with vehemence that if at all eligible for delayed compensation, the complainants are entitled to get meager compensation @Rs.5/- per square feet of the builtup area of the unit as mentioned in the  allotment letter and the same being a binding  contract between the complainants cannot be modified by this Commission. It may be stated here that this Commission is not bound to rely on a harsh, oppressive and unconscionable clause contained in the allotment letter/agreement because it is well settled law that a court can strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between the parties who are not equal in bargaining power. The consideration or object of an agreement is unlawful inter-alia if it is of such a nature that, if permitted, it would defeat the provisions of any law or if the court regards it as immoral or opposed to public policy. If the object of some terms and conditions of agreement is unlawful, the same are deemed to be void. Our this view is supported by the judgment passed by the Hon'ble Supreme court in the case of Central Inland Water Transport Corporation Ltd. & Anr. Vs. Brojo Nath Ganguly & Ors. (1986) 3 SCC 156 wherein it has been clearly held that the courts can strike down the terms of a contract. The Hon'ble Court has held that "......this principle is that the courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between the parties who are not equal in bargaining power...." The draft legislation provided by the Law Commission of India in its 199th Report which addresses the issue of 'Unfair  (Procedural & Substantive) Terms in Contract' has stated  that "A contract or a term thereof is substantively unfair if such contract or the term thereof is in itself harsh, oppressive or unconscionable to one of the parties."  The above view has been reiterated by the Hon'ble Supreme Court in Pioneer Urban Land and Infrastructure Ltd. vs. Gouvindan Raghavan Civil Appeal No.12238/2018 wherein in paragraph nos. 3.8, 6.3, 6.6 & 6.7, it has been clearly held that if the terms of contract are harsh, oppressive and unconscionable to one of the parties, such a contract cannot be relied upon and Courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power.  In this view of the matter, contention raised by the opposite party that the complainants, if at all eligible for delayed compensation, are entitled to get meager compensation @Rs.5/- per square feet of the builtup area of the unit is rejected. 
2.               In Nagesh Maruti Utekar Vs. Sunstone Developers Joint Venture, Consumer Case No. 12 of 2017, decided on 04 May 2022, the Hon’ble National Commission awarded interest @9% p.a. from the committed date of delivery till possession is delivered. Relevant part of the said order is reproduced hereunder:-

“……Consequently, the Opposite Party Developer is directed to pay interest @9% w.e.f. 31.03.2014, i.e., the expected date of delivery of the possession, on the amount deposited by the respective Complainant till 02.09.2017, i.e., the date on which the possession of the Flat was offered by the Opposite Party Developer, within two months from today……”

 

In Shreya Kumar & 11 Ors. Vs. M/s. Ansal Housing & Construction Ltd. & 3 Ors., Consumer Case No. 1021 of 2017, decided on 05 May 2022, the Larger Bench of the Hon’ble National Commission has awarded interest @9% p.a. from the committed date of delivery till possession is delivered. In the present case, the complainants are still empty handed and have to approach this Commission for redressal of their grievance by way of filing this complaint. Under above circumstances, in our considered opinion, if we grant interest @9% p.a. to the complainants on the entire amount deposited by them, from the due date of possession of their unit, as held above, till delivery of possession thereof, that will meet the ends of justice.

Relief granted as under:-

15]              For the reasons recorded above, this complaint is partly accepted, with costs and the opposite party is directed as under:-

1. To deliver actual physical possession of the unit in question, as per the specifications mentioned in the allotment letter, to the complainants, complete in all respects, after obtaining occupation and completion certificate from the competent Authorities, within a period of 45 days from the date of receipt of a certified copy of this order, on receipt of the remaining amount due from them, without charging any delayed interest thereon.     
2. To pay to the complainants, compensation by way of interest @9% p.a. starting from 06.07.2021 till 31.12.2023, on the amount deposited by them, within a period of 30 days from the date of receipt of a certified copy of this order, failing which the entire accumulated amount shall carry interest @12% p.a. from the date of default till this entire accumulated amount is paid to the complainants.
3. To pay to the complainants, compensation by way of  interest @9% p.a. on the amounts deposited, w.e.f. 01.01.2024, onwards (per month), by the 10^th of the following month till actual delivery of physical possession of the unit, complete in all respects. 
4. To pay to the complainants, compensation to the tune of Rs.1,00,000/- for causing them mental agony and harassment and also for deficiency in providing service and adoption of unfair trade practice and cost of litigation to the tune of Rs.35,000/- within a period of 30 days, from the date of receipt of a certified copy of this order, failing which the said amounts shall carry interest @9% p.a. from the date of default till realization.

16]              Certified copies of this order be sent to the parties, free of charge.

17]              The file be consigned to Record Room after completion.

Pronounced.

 20.12.2023

 

[RAJ SHEKHAR ATTRI]

PRESIDENT

 

 

 

 (RAJESH K. ARYA)

MEMBER

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