MRS. M. SHREESHA, MEMBER

This Complaint has been filed under Section 21 (a) (i) of the Consumer Protection Act, 1986 (in short “the Act”) against Parsvnath Developers Limited (hereinafter referred to as “the Developer”), seeking the following reliefs:

1. Direct the O.P. to refund the entire amount collected from the complainants towards the consideration of the flat along with interest @ 18% p.a. on the amount paid by them from the date of collection of the amounts till it is actually returned to the complainants.

2. Direct the O.P. to pay a sum of Rs.5,00,000/- (Rs. Five Lakhs only) towards mental agony and harassment and towards cost of litigation to the complainants.

3. Any other order(s) as may be deemed fit and appropriate may also kindly be passed

    

2.       The brief facts as set out in the Complaint are that the Developer launched a housing project known as “Parsvnath Royale” in Sector 20, Panchkula Haryana. It is stated that the project was widely advertised by the Developer and on seeing the advertisements, the Complainants approached the Developer and on the promises made by the officials of the Developer that the possession will be delivered within 36 months, the Complainants vide Application dated 04.04.2006 applied for a Flat in ‘Parsvnath Royale’.  A Flat Buyer’s Agreement was entered into on 22.01.2007 for Flat No. T2-504, 5^th floor in Tower T2 of 178 sq. ft. of the project for a total sale consideration for ₹59,63,000/-. It is averred that the promised date of delivery as per Agreement was 36 months from the date of Agreement. It is averred that some clauses of the Agreement are one-sided, for which Complainants requested for modification but the Complainants were told that the Buyer’s Agreement has to be signed as it is and in case the Complainants are not agreeable, then the allotment would be cancelled and the earnest money would be forfeited. Hence, the Complainant was forced to sign the Flat Buyer’s Agreement as he had already paid ₹8,94,450/- out of the total sale consideration to the Developer.

3.       It is averred that as per Clause 5 of the Builder Buyer’s Agreement, ‘Time’ is the essence of the Contract and as per Clause 10 (a) the construction was to be completed within 36 months from the date of the Agreement. As per Clause 5 (b) the Complainants are liable to pay interest @ 24% p.a. for any delay in making payment as demanded by the Developer.  It is stated that vide letter dated 27.03.2012 the Developer changed the unit allotted to the Complainants from unit T2-504 to T4-802 in the same project. It is averred that the Complainant has paid a sum of ₹47,63,386/- to the Developer as  per demands made by the Developer from time to time.  It is pleaded that despite collecting substantial amounts from the Complainants, the Developer has not constructed the tower in which the house of the Complainants is situated. It is averred that despite on-time payment of the demands made by the Developer and despite repeated requests through letters, emails, phone calls and personal visits, the Developer has failed to deliver the possession of the house till the date of filing of the Complaint.  It is further averred that the Complainants had purchased the Flat for specific purpose of residence for their family and themselves and are suffering severe financial losses and mental agony.

4.       It is pleaded that as per Clause 5 (b) of the Agreement, interest @ 24% p.a. was liable to be charged in case of any delay in payment of any amount from the Allottees. Therefore applying the same parity, the Developer should refund the amounts collected with the same rate of interest. Vexed with the attitude of the Developer, the Complainants approached Haryana State Consumer Disputes Redressal Commission, Panchkula on 02.03.2016 for redressal of their grievance. Vide order dated 10.03.2017, the Complaint was dismissed as withdrawn  with liberty to file fresh Complaint, as the compensation claimed was more than one crore. Thereafter the Complainants approached this Commission seeking the aforenoted reliefs.

5.       The Developer filed its reply admitting to the Allotment, receipt of the amount of ₹47,63,386/-, execution of the Flat Buyer’s Agreement dated 22.01.2007 and to Clause 10 (a), wherein the first Opposite Party has agreed to complete the construction within 36 months from the date of execution of the Agreement.  It is averred that the possession was ‘likely’ to be delivered within 36 months plus six months grace period  from the date of execution of the Agreement and this Clause was subject to Force Majeure conditions. It is averred that this Commission has no jurisdiction to entertain the instant Complaint as matter involves complex question of facts and law and required detailed evidence and hence only the Civil Court has the jurisdiction; that Clause 10 (a) of the Agreement has a clause ‘Likely’, which attracts the doctrine that ‘ Time is not the essence of the contract’; that non completion of the project on time was beyond the control of the Developer  as there was global recession in the year 2009, which affected the real estate sector and there was financial crunch experienced by the Developer which lead to the delay; that in the year 2006 to 2008 the sale of the project was not as per the expectations due to which problem of liquidity of funds  was faced by the Developer and the construction  could not commence effectively till the year 2010.; that the Complainants purchased the subject Flat for commercial purpose and therefore they are not Consumers; that this Commission does not have pecuniary jurisdiction to entertain this Complaint as Complainants have paid ₹47,63,386/- towards the cost of the flat; that the Complainants never objected to the Flat Buyer’s Agreement from the year 2006; that the adequate mechanism for compensation is provided in case of delay in Clause 10 (c) of the Agreement; that the Complainants are persistent defaulters in making payments  on time and the timely payment of the instalment is the essence of the Agreement;  that the Developer is trying hard to complete the project and deliver the possession; that possession has been offered of two towers  for fit out purposes in the project and that all  the aforenoted reasons lead to delay in construction, which was beyond the control of the Opposite Parties and falls under Force Majeure conditions and all the other averments made in the Complaint are denied and seek dismissal of the Complaint with costs.

6.       The Complainants filed their Affidavit by way of Evidence and marked EX PW1/A (copy of the Buyer’s Agreement), EX PW1/B (details of the payments made), EX PW1/C (copy of the construction updated from the website of the Developer) and EX PW1/X (the Complaint) on their behalf.

7.       The Opposite Parties filed their Affidavit by way of Evidence and marked  Exhibit-OP 1/1 (copy of Board Resolution), Exhibit- OP 1/2 (copy of the advance registration form), Exhibit- OP 1/3 (copy of the letter dated 21.03.2012), Exhibit-OP 1/4 (copies of demand notice and reminders), Exhibit-OP 1/5 (copy of letter dated 27.03.2012), Exhibit-OP 1/6 (photographs of the project), Exhibit-OP 1/7 (copy of the letter dated 23.05.2018) and  Exhibit-OP 1/8  (copy of the letter dated 05.06.2018) on its behalf.

8.       In brief, it is the case  of the Complainants that despite paying an amount of ₹47,63,386/- out of the total sale consideration of ₹59,63,000/- for unit No. T4-802, 8^th floor in Tower T4 of the project of 1780 sq. ft.  and executing the Builder Buyer Agreement on 22.01.2007, with the promised time for delivery  of possession being 36 months from the date of Agreement,  till date  the Opposite Party did not complete the construction nor offered possession and hence they seek for refund of the amount paid with interest @ 18% p.a. together with compensation and costs.

9.       The contention of the Learned Counsel for the Developer that the Complainants are not ‘Consumers’ and that they are only  ‘Investors’  is completely unsustainable in the light of the judgement of this Commission in Kavita Ahuja vs. Shipra Estates I (2016) CPJ 31, in which this Commission has laid down the principle that the onus of establishing that the Complainant was dealing in real estate is on the Developer, which in the instant case they have failed to discharge or file any documentary evidence to prove their case that the Complainants are ‘Investors’ and not ‘Consumers’. Therefore we are of the considered view that the Complainants are ‘Consumers’ as defined under Section 2 (1)(d) of the Act.  The contention of the Developer that this Commission does not have pecuniary jurisdiction to entertain the Complaint is unsustainable in the light of the larger bench decision of this Commission in “Ambrish Kumar Shukla & Ors. vs. Ferrous Infrastructure Private Limited I (2017) CPJ 1 NC”, wherein              it has been held that pecuniary jurisdiction should be construed keeping                     in view the total value and goods and services in addition to the        compensation prayed for. In the instant case admittedly the                  Complainants have paid an amount of ₹47,63,386/- and has sought for damages by way of interest @ 18% p.a., compensation of ₹5,00,000/- and other reliefs which totalled goes beyond One Crore and definitely attracts the pecuniary jurisdiction of this Commission. The stand taken by the Opposite Party that the period of delivery of possession is 36 months as defined in clause 10 (a) is not sacrosanct as it is stated in the said clause that “Construction of the Flat is ‘likely’ to be completed within a period of thirty six months” and therefore ‘Time is not the essence of the contract’ and the delay is attributable to Force Majeure Events, and therefore no deficiency of service can be attributed to them is totally unsustainable as the Opposite Party could not substantiate by means of any documentary evidence  that the project was delayed by Force Majeure Events.  Except for stating that there was global recession in the year 2009, which affected the real estate sector and there was financial crunch experienced by the Developer which led to the delay, which submission, viewed from any angle, cannot be said to be a “Force Majeure Event”. The Opposite Party has not filed any material on record to prove that the reasons were beyond their control.

10.     At the cost of repetition, as no material has been produced by the Opposite Party to prove that the completion of construction and offer of possession has been delayed on account of reasons beyond their control, there is no justification for the said delay. We find it a fit case to place reliance on the judgment of this Commission in Emmar MGF Land Ltd. & Ors.  vs. Amit Puri [II (2015) CPJ 568 NC], wherein it was laid down that after the promised date of delivery it is the discretion of the Complainant whether he/she wants to accept the offer of possession, if any, or seek refund of the amounts paid with reasonable interest. In the instant case, the Complainants sought for refund of the principal amount with interest and compensation as construction is still not complete. We are of the view that the Complainants cannot be made to wait indefinitely for the delivery of possession and the act of the Opposite Party in relying on Force Majeure clause while retaining the amounts deposited by the Complainants, is not only an act of deficiency of service but also of unfair trade practice, especially in light of the view and the fact that the Developer charges interest @ 24% p.a.  for any delay in the payments made by the Flat purchasers, but at the same time, stipulates in Clause 10(c) of the Agreement that compensation would be paid at ₹5/- per sq. ft. of the super area per month for the period of delay, which approximately amounts to only 1.5% per annum. We are of the view that such terms in Clauses are extremely unfair and one-sided and fall within the definition of ‘unfair trade practice’  as defined under Section 2(r) of the Act. At this juncture, we find it a fit case to place reliance on the recent judgement of the Hon’ble Apex Court in Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, II (2009) CPJ 34 (SC), wherein the Apex Court has observed as follows:

“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.

 7. In view of the above discussion, we have no hesitation in holding that the terms of the Apartment Buyer’s Agreement dated 08.05.2012 were wholly one-sided and unfair to the Respondent – Flat Purchaser. The Appellant – Builder could not seek to bind the Respondent with such one-sided contractual terms.”

          For all the aforenoted reasons, this judgment squarely applies to the facts and circumstances of this case.

11.     We find it a fit case to place reliance on the judgement of the Hon’ble Supreme Court in Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra, II (2019) CPJ 29 (SC), in which the Hon’ble Apex Court has observed as hereunder:

“……….It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession. By 2016, nearly seven years had elapsed from the date of the agreement. Even according to the developer, the completion certificate was received on 29 March 2016.  This was nearly seven years after the extended date for the handing over of possession prescribed by the agreement. A buyer can be expected to wait for possession for a reasonable period.  A period of seven years is beyond what is reasonable. Hence, it would have been manifestly unfair to non-suit the buyer merely on the basis of the first prayer in the reliefs sought before the SCDRC. There was in any event a prayer for refund.

In the circumstances, we are of the view that the orders passed by the SCDRC and by the NCDRC for refund of moneys were justified.”

15.     In the instant case also the Complainants cannot be made to wait indefinitely for possession of the unit, as the construction is yet to be completed even after a period of more than 12 years has lapsed from the date of Agreement. Therefore we are of the considered view that the Complainants are entitled for refund of the principal amount with reasonable interest.

16.     Now, we address ourselves to the percentage of interest that has to be awarded to meet the ends of justice.

17.     Though it is the case of the Complainants that for any default, the Developer charged interest @ 24% p.a. from the buyers, having regard to the fact that the Banks have lowered the interest rate and the Hon’ble Supreme Court has been awarding interest keeping in view the current market situation and the recent decline in the cost of borrowing and return on the investments made with the Banks, we are of the considered view that simple interest @ 12% p.a. would meet the ends of justice. We also award costs of ₹25,000/-.

18.     Hence, this Complaint is allowed in part directing the Opposite Party to refund the principal amount with interest @ 12% p.a.  from the respective dates of deposit till the date of realization together with costs of ₹25,000/- to the Complainants.

19.     Time for compliance four weeks from the date of receipt of a copy of this order, failing which the amount shall attract interest @ 14% p.a. for the same period.