C.VISWANATH

1.      According to the Complaint, on 27.02.2008, the Complainant booked a Flat measuring 4,150 sq./ft. under down payment plan costing (BSP) Rs. 1,18,27,500/- in “Omaxe Royal Residence –Royal Retreat” in Pakhowal Road, Ludhiana (Punjab) by paying Rs.9,12,000/- and Rs.2,28,000/- vide receipt No. 296231 dated 28.02.2008 and No.300227 dated 26.03.2008.  Thereafter, the Complainant paid upto 95% of the BSP totalling to Rs.1,04,99,512/- as per the payment plan of the Opposite Party, including 50% of other miscellaneous charges by the due date of 23^rd May 2008 for the subject Flat. This required 3 or 4 visits to the site and the Opposite Party being fully paid, allotted Flat no. 301 at the 3^rd floor of the Tower called Royal Retreat-2. On 21.03.2008, the Opposite Party started construction of the project, performing Bhoomi Pujan, where the Complainant was also present. However, due to slow progress of the construction work the deadline to deliver possession of the flat i.e. 21 September 2010 expired. Due to this delay on the part of the Opposite Party, the Complainant suffered a huge loss. The Complainant alleged that in April, 2008, the Opposite Party called the Complainant at the site office in Ludhiana and threatened the Complainant to sign an Application form lest 15% amount of BSP already paid would be forfeited. There was no mention of 30 months period for delivery of the possession of the flat as was mentioned in the two page catalogue shown at the time of getting the booking form the Complainant. Such kind of stipulation/terms in the subsequent documents is against public policy attracting section 24 of the Indian Contract Act. The Complainant having no option, except to bow down to the mischievous demands of the Opposite Party, signed the said application  form under grave duress and protest which was even against the basic commitments of the Opposite Party made at the time of booking of the flat and taking part consideration amount. On 19.09.2008 i.e. six months later when Opposite Party had received 95% of the BSP, the Complainant received a booklet containing Agreement/Terms and Conditions from the Opposite Party for signatures within 30 days, in token of acceptance of detailed Terms and Conditions therein. In the detailed Agreement, the relevant Clause regarding delivery period of Flat, read as follows:-

“28. (a) that the company shall complete the development/construction of the Flat within a period of Thirty months from the date of signing of this Agreement by the Buyer(s) or within an extended period of six months, subject to force majeure conditions and subject to other Flat Buyer(s) making timely payments or subject to other reasons beyond the control of the Company. No claim by way of damages/compensation shall lie against the Company in case of delay in handing over the possession on account of any of the aforesaid reasons and the Company shall be entitled to a reasonable extension of time for the delivery of possession of the said Flat to the Buyer(s)”.

2.        The clause regarding compensation payable by the Company for delay on its part, read as follows:-

“28(f) In case of delay in construction of the said Flat attributable to delay of Company subject clause (a) & (b) herein above, the Company would pay a sum at the rate of Rs. 5/- per sq. ft.  of Super Area per month for the period of delay to the Buyer(s), provided however that the Buyer(s) has made payment of all installments towards the sale consideration amount of the said Flat in time and without making any delay to the Company.”

3.        It may be appreciated that all the terms and conditions of the Agreement were crafted fully in favour the Opposite Party and against the Complainant.

i. for delay in payment on the part of Complainant, the Opposite Party would charge 24% interest on delayed payment.

ii. for delay on the part of Opposite Party in delivering the Flat, it would pay less than 2.5% as per above formula of Rs. 5 per sq. ft. per month.

 iii. Possession within 30 days of offer will automatically mean that the Opposite Party has fulfilled all its obligations under the Agreement.

iv. if the Opposite Party abandons the Project for any reason, it would refund the payment with negligible compensation to Complainant.

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:-

• Cancel the booking of subject Flat and refund Rs. 1.05 Crore of the Complainant along with 10% interest, compounded quarterly (as per practice with Banks) w.e.f. May 2008.

• Pay Rs. 25 lakh, the amount of LTCG Tax that the Complainant will have to pay for failing to get a new house within 3 years as per Sec.54 of IT Act.

• Pay the suitable cost of litigation to Complainant to pursue present complaint.

• Pass any other such directions/orders which this Hon’ble Commission deem fit may also pass in the interest of justice to do complete justice in the present case.

   

5.      The Complaint was contested by the Opposite Party by filing written statement in which it was reiterated that the said Complaint was not maintainable due to non-joinder of necessary parties. The Flat in question was booked jointly by the Complainant and her husband and the agreement was also executed between them and the Opposite Party. As such the joint allottee was also a necessary party to the present case and the complaint filed by the Complainant was not maintainable.

6.      It was submitted that Complainant was not a “consumer” as defined under section 2(d) of the Consumer Protection Act, 1986 as the Complainant had booked the flat with the Opposite Party as an investment in the real estate market. The Complainant belonged to the category of people who invest their money in real estate markets for the purpose of earning handsome returns on their investments. The Complainant also booked the flat with the intention of selling the same after appreciation in the prices and to earn profit and as such she had booked the flat for commercial purpose. On this ground alone the Complaint filed by the Complainant was not maintainable and liable to be dismissed.

7.      It was submitted that the Opposite Party had neither committed any deficiency in service nor had indulged into any unfair trade practice and as such the Complainant cannot seek any relief from this Commission. Alleged delay in completion of construction cannot be termed as deficiency in service, particularly when the time for completion of construction was not essence of the contract and the possibility of delay in completion of the construction was contemplated at the time of contract and the consequences of such delay were duly mentioned in the said contract. Even if it is presumed that the Opposite Party had breached its obligations under the contract regarding completion of construction, the said breach per se cannot be termed as deficiency in service and the Complainant cannot become entitled to invoke the jurisdiction of this Commission merely on the basis of the said alleged breach. On this ground also the Compliant was liable to be dismissed.

8.      It was submitted that the Complainant was not entitled to rescind the contract and to seek refund of the amount paid by her on the ground of alleged delay in completion of the construction. The time for completion of the construction was not essence of the contract and the possibility of delay was very much within the knowledge of the Complainant at the time of entering into the contract and the consequences for such delay has been duly mentioned in the contract itself. Therefore, even if it is assumed that the Opposite Party failed to complete the construction within the stipulated time, the Complainant may be entitled for compensation for such delay as per the terms of the contract but she cannot be entitled to terminate the contract itself. However, the issue of payment of compensation, if any, to the Complainant could be decided only at the time of handing over of possession of the Flat to the Complainant.

9.      It was submitted that the Complainant cannot be allowed to discard the terms and conditions of a written contract duly entered between the Complainant and the Opposite Party, particularly when more than 4 years had lapsed since the date of booking/contract and when the booking form and the agreement were signed and executed by the Complainant without any duress, pressure or protest. The Complainant before signing the application form for booking as well as the agreement had duly read and understood the terms mentioned therein and in token of acceptance thereof signed the application form and the agreement of her free will and accord. The Opposite Party was entitled to offer sale of its flats on its own terms and conditions and the Complainant was to free to accept or not to accept the said terms and conditions. The Complainant and her husband duly accepted the said terms and conditions and signed the application form as well as the agreement and as such the same were fully binding upon the Complainant. Moreover, the Complainant cannot be permitted to rely upon certain clauses of the agreement which were suitable to her and discard other clauses in the same very agreement which were found not suitable. If the stand of the Complainant was accepted, the written contracts would lose their sanctity and be considered as waste paper.    

10. Heard the Learned Counsel of the Complainant as well as the Opposite Party.  Also carefully perused the record.

11. The first contention of the Opposite Party was that Complaint was not maintainable due to non- joinder of necessary parties. The Complainant has admitted in her rejoinder that flat in question was jointly booked by the Complainant and her husband and agreement was also executed between them and the Opposite Party. The husband of the Complainant i.e. Mr. Amrik Singh has given his affidavit dated 25^th April, 2012 along with the Complaint declaring his no objection for his wife being the sole Complainant. The affidavit reads as under: -

“That I being the husband of complainant am the co applicant in the agreement dated 23.05.2008 (Annexure A8) with the opposite party.

That I have no objection for my wife to be the sole complainant in the present complaint and pursuing the case, signing the pleadings and receiving the decretal amount and to do whatsoever is required in the best interest of the case, for the sake of simplicity and sake of brevity in pursuing the above titled complaint.

That my above statement is true.”

        As seen from the above, the husband of the Complainant has clearly authorised his wife to file the Complaint. The relationship of husband and wife, in marriage, is such that of commonality of interest and inter-dependence on each other, entitles either party to step in the shoes of another. There is, therefore, no merit in the contention of the Opposite Party, as the Complainant’s husband has given right to his wife to file the complaint.

12.    The second contention of the Opposite Party is that Complainant is not a “Consumer” as defined under section 2(d) of the Consumer Protection Act, 1986 as the Complainant had booked the flat with the Opposite Party as an investment in the real estate market i.e. for commercial purpose. 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 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”.

13.    The Complainant has clearly stated in his affidavit that he was desirous of purchasing a residential property as she just sold her old residential property, was in need to buy a new residence and also to save on Long Term Capital Gains Tax under Section 54 of Income Tax Act by getting a new house built within 3 years of sale of her old house.  Even Otherwise no evidence whatsoever has been adduced to show that the Complainant is involved in any commercial activity. There is no merit in the contention of the Opposite party that Complainant is not a consumer as per the Consumer Protection Act, 1986. It is just another routine, technical objection raised in the reply.

Third point raised was that Complainant was not entitled to rescind the contract and to seek refund of the amount paid by her on the ground of alleged delay in completion of the construction. In terms of clause 28 (a) of the Buyer’s Agreement, the Company shall complete the development/construction of the Flat within a period of thirty months from the date of signing of the Agreement by the Buyer(s) or within an extended period of six months, subject to force majeure conditions [as mentioned in Clause (b) hereunder] and subject to other Flat Buyer(s) making timely payment or subject to any other reasons beyond the control of the Company. Even after expiry of 36 months, the Opposite Party failed to complete the construction and handover the possession of the booked Flat. Several years has elapsed since the agreement. A buyer can only be expected to wait for possession for a reasonable period and not so long.

14.    In Fortune Infrastructure Versus Trevor D’ Lima & Ors. (2018) 5 SCC 442, in which Hon’ble Supreme Court held that  A person cannot be made to wait indefinitely for the possession of the flats allotted to them and they are entitled to seek the refund of the amount paid by them, along with compensation.

15. The inordinate delay in handing over possession of the flat clearly amounts to deficiency in service. In our considered opinion, the Complainant is entitled to seek refund of the money deposited by him along with appropriate compensation. We, therefore, direct the Opposite Party to refund the amount deposited/ paid by the Complainant 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 Complainant. The above amounts be deposited in the joint account of the Complaint with her husband (i.e. Mrs. Jatinder kaur and Mr. Amrik Singh Ubee). Payment in terms of this order shall be made within three months from today.