IN THE STATE COMMISSION : DELHI
(Constituted under Section 9 of the Consumer Protection Act, 1986)
Date of Decision: 30.11.2015
Complaint Case No. 291/2010
IN THE MATTER OF:-
Sh. Harmesh Kumar Kanwal
H. No. 169, Block-7, Geeta Colony,
Delhi …..Complainant
Versus
M/s Parsvanath Developers Ltd.,
Corp. Off; 6th Floor, Arunachal Building,
19, Barakhamba Road, New Delhi
Regd. Off: Parsvanath Metro Tower,
Near Shahdara Metro Station,
Shahdara, Delhi. …..Opposite Party
CORAM
(Justice Veena Birbal, President)
(Salma Noor, Member)
(O.P. Gupta, Member (Judicial)
1. Whether reporters of local newspaper be allowed to see the judgment?
2. To be referred to the reporter or not?
(Justice Veena Birbal, President
1. A complaint under section 17 of the Consumer Protection Act, 1986 (in short ‘The Act’) is filed by the complainant Sh. Harmesh Kumar Kanwal wherein it is alleged that the OP proposed to develop a residential Housing Complex by the name of “Parsvnath Privelege” and issued advertisement for sale of the flats in the aforesaid complex to the general public. One Smt. Chitra Goel r/o 13/34, Shastri Nagar, Delhi had booked a flat bearing no. T-20-603 in the aforesaid complex of the respondent on 02.05.2006 and requisite amount was paid by her. Later on she transferred all her rights and interest in the said flat to the complainant on 10.05.2007 and OP also accorded its consent to said transfer vide letter dated 10.05.2007 and allotment was transferred in the name of complainant. The same was also confirmed by the OP vide its letter dated 23.05.2007 and on the same date OP executed a Flat Buyer Agreement (in short ‘The Agreement’) with the complainant. The cost of the flat as per the Agreement was fixed at Rs. 52,86,750/-. At the time of signing the Agreement, the complainant had paid 25% of the sale price as per schedule of payment i.e. Rs. 13,21,687/- to OP. As per terms and conditions of the Agreement, the construction of the Flat was agreed to be completed within a period of 36 months. It is alleged that the OP failed to fulfill its commitment and the Flat was never completed. On repeated enquiries the complainant was told that there was some internal problems due to which the project was not being completed. It is alleged that on 27.04.2010 the complainant sent a legal notice to OP through his Advocate calling upon OP to return Rs. 13,21,687/- along with interest @ 24% p.a. and to pay damages to the tune of Rs. 10,00,000/- for agony and mental harassment. The OP had failed to respond to the said notice. Thereupon, complainant sent a reminder to OP for refund of amount with interest and compensation. The OP did not respond to said reminder also. On 12.06.2010 the OP had sent a letter whereby it had acknowledged its failure to complete the project within time, however, sought 18 months time for completion of the project. It is alleged that in the aforesaid letter there was no mention of legal notice and the reminder sent by the complainant.
2. The complainant has alleged that the OP did not deliver the flat in question within the stipulated time as per terms and conditions of Agreement. It is alleged that by booking the Flat and taking money from prospective buyers and thereafter not complying with the schedule of construction amounts to unfair trade practice on the part of OP. It is alleged that the complainant is a senior citizen having retired from service and is suffering from various ailments. The complainant has suffered harassment at the hands of OP due to non refund of amount. The OP has deprived the complainant of making alternative arrangement. The complainant has made prayer for refund of amount i.e. Rs. 13,21,687/-, interest of Rs. 10,04,482/- on aforesaid amount of Rs. 13,21,687/- @ 24% p.a. from May 2007 to till date, Rs. 10,00,000/- towards compensation and litigation expenses.
3. The OP has contested the complaint case by filing written statement wherein preliminary objection has been raised on the maintainability of the present complaint by alleging that the same involves complicated questions of law and facts and as such cannot be entertained by this Commission. On merits, it is admitted that earlier the flat in question was booked by Mrs. Chitra Goel and thereafter the said booking was transferred in the name of the complainant. The execution of the Agreement with complainant is also admitted. It is also admitted that as per Clause 10(a) of the Agreement, the construction of the project was to be completed within the period of 36 months subject to force majeure and restrains from court/authority etc. However, it is alleged that due to global recession, which effected the entire real estate section in India, the development work at the site was slowed down. It is alleged that OP shall hand over the flat to the complainant at the earliest. It is further stated that as per clause 10(c) of the Agreement the right of the complainant is fully protected to claim compensation in case of delay as he is entitled to claim compensation as per the aforesaid clause. It is further alleged that OP is trying to revive its project with positive intention and there is likelihood of the project being completed at the earliest. It is alleged that there is no deficiency in service on the part of the OP. It is further alleged that if the complainant is given refund, in that event under Clause 5(a) of the Agreement earnest money being 15% of the basic price would be forfeited and the balance amount can be refunded to the complainant.
4. Rejoinder is filed by the complainant denying the allegation made by the OP against him. The complainant has reiterated its case as is alleged in the complaint.
5. Both the parties have filed evidence by way of affidavits. The complainant has reiterated his case on oath in the affidavit and has placed on record the Agreement between the parties i.e. Exhibit CW1/1. The complainant has deposed having made payment of Rs. 13,21,687/- to OP vide Receipt Exhibit CW1/2. He has further stated in the affidavit that as per terms and conditions of the Agreement EX CW1/1 the construction was to be completed within 36 months and possession was to be delivered on or before the said period but OP has not given the same. The construction till date is not compete. He has deposed in the affidavit having sent Legal notice dated 27.04.2010 to OP. However, there was no response. Thereafter, he had sent a reminder dated 12.06.2010. Despite that there was no response from the side of OP. The Legal notice and postal receipt are exhibited as Ex CW1/3 (Colly). The complainant has also stated in the affidavit that the OP in order to avoid liability sent a letter dated 10.06.2010 whereby it acknowledged its failure to complete the project within time and sought another 18 months for completion of the project. The complainant has further deposed that he is a senior citizen and also retired from service. He is a patient of blood pressure and diabetes. He has suffered harassment at the hands of OP as the plans for settling his unmarried son has been demolished. The complainant has deposed having suffered mental agony and harassment at the hands of OP as OP has retained his hard earned money. The complainant has repeated prayer of complaint case in the affidavit.
6. Respondent has also filed evidence by way of affidavit of Sh. Yogesh Kharbanda Addl. G.M. (Commercial) of the OP and has reiterated the averments of written statement on oath. It is stated on oath that as per the Agreement, in case of delay in handing over the possession, the complainant is only entitled to compensation @ 5 sq. ft. of the super area for the period of delay. It is also stated in the affidavit that initially the flat in question was booked by Mrs. Chitra Goel who had paid the booking amount. Subsequently, thereto Mrs. Chitra Goel had transferred her rights and interest in the flat in favour of the complainant by moving an application dated 10.05.2007 i.e. Ex OP1/1. It is further stated in the affidavit that due to phenomenon of global recession, which has effected the real estate section in India, the development work has been slowed down but all efforts are being made by the OP to hand over the possession at the earliest.
7. The complainant has argued in person. We have heard him as well as Ld. counsel for OP and perused the record.
8. The complainant has contended that OP has failed to fulfill its commitment and did not hand over the possession within 36 months as agreed between the parties vide Agreement Ex CW1/1. Since there is no likelihood of the same being completed in near future the complainant has no option but to seek the refund of money. It is contended that the extension of time is permissible as per grounds mentioned in Clause 10(a) of Agreement Ex CW1/1 i.e. subject to force majeure and restraints/restrictions for any courts/authorities and any circumstances, beyond the control of OP. On the plea of global recession extension of time is not permissible as the same does not come within the purview of Agreement. Further nothing has also been placed on record by the OP to substantiate that due to recession in the market OP has not been in a position to complete the project. It is submitted that when timely payments have been received by OP, recession has nothing to do with the completion of project. It is submitted that bald allegations are made by OP in this regard. It is submitted that money deposited by him be refunded within 18% interest along with suitable compensation and costs of litigation.
9. On the other hand, Ld. Counsel for the OP has argued that complainant in not a ‘consumer’ as defined section 2(1)(d) of the Act as complainant has purchased the flat from market i.e. from Mrs. Chitra Goel and not from the OP and as such the present complaint is not maintainable. On merits it is contended that due to phenomenon of global recession which effected the real estate section in India, development work at the site could not be completed. It is submitted that it is the endeavour of the OP to hand over the possession to the complainant at the earliest. It is contended that even if there is a delay on the part of OP in completing the project, the right of the complainant is duly protected under clause 10(c) of the Agreement and as such the complaint filed is baseless. It is contended that there is no deficiency in service on the part of the complainant. It is further contended that since the complainant is asking for refund of amount, the same amount to cancellation of booking and under clause 5(a) of the Agreement Ex CW1/1, the amount can be refunded to him after forfeiture earnest money i.e. 15% of the basic price of the flat. It is further contended that since the complainant is praying for refund of money, he is not entitled for any compensation.
10. It may be mentioned that in written statement preliminary objection is raised that the complaint involves complicated question of law and facts as such the same can’t be entertained by the Commission. However, the same is not pressed at the time of arguments. Further we don’t find any complicated question of law and facts being involved in the present case. Accordingly, the aforesaid objection is rejected.
11. It is admitted position that the flat in question was earlier booked by Mrs. Chitra Goel. It is also admitted position that Mrs. Chitra Goel had moved an application i.e. Exhibit OP1/1 dated 10.05.2007 for change of right to purchase the flat in favour of the complainant. The application Ex-OP-1/1 was moved before the OP and it was signed by Mrs. Chitra Goel as well as complainant. The said application is on the printed performa of the OP. The request for change of right to purchase in favour of complainant was accepted by OP and thereupon the Agreement Ex CW1/1 dated 23.05.2007 has been executed between the complainant and OP. Further payment from the complainant is also received by OP. The OP has admitted having received a sum of Rs. 13,81,687/- from the complainant. The total basic price of the flat is Rs. 52,86,750/- and the balance amount was payable as per payment plan B annexed with the aforesaid Agreement. It is also admitted position that there is no default in making payment by the complainant.
12. The contention of the OP is that the complainant is not a ‘consumer’ being a second purchaser of the flat and OP has relied upon judgment of Mumbai District Forum at Bandra in CC No. 169/2001 titled Captain Sanjiv Savala and Other Vs. Sh. Devender Ghai and another. Firstly, the judgment relied upon is not binding on us. Further, in the referred case the transfer by a former purchaser to subsequent purchaser was without prejudice to the rights of the builder. We may mention that in Santosh Johari and Ors. Vs. Unitech Ltd., MANU/CF/0364/2015 the National Commission, has awarded compensation for delay in delivery of possession to the purchasers who acquired the allotment by way of repurchase from the original allottee. In the present case the flat was earlier booked by Mr. Chitra Goel on 02.05.2006. The said Smt. Chitra Goel had applied for change of right to purchase in favour of the complainant by moving an application Ex-OP1/1 which was signed by Ms. Chitra Goel as well as by complainant and the same was accepted by OP on and thereafter OP had entered into Flat Buyer Agreement i.e. Agreement Ex CW1/1 with complaint and also accepted payments from him. Now the OP cannot turn around and say that the complainant is not a ‘consumer’. We may also mention that the aforesaid plea of second purchaser is not taken in the written statement or in the evidence by OP. The same is raised for the first time in written submissions only. However, the plea raised is not legally sustainable and is rejected.
13. The Agreement Ex CW1/1 is perused. As per clause 10 (a) of aforesaid Agreement construction was to be completed within 36 months to and possession was to be delivered on or before the said period. The aforesaid clause is reproduced as under:
“(a) Construction of the Flat is likely to be completed within a period of 36 (Thirty six) months from the date of commencement of construction of the particular Block in which the Flat is located on receipt of all requisite approvals including sanction of building plans, environment clearances, etc. subject to force majeure and restraints/restrictions from any courts/authorities, non-availability of building materials and any circumstances, beyond the control of Developer and subject to timely payments by the Buyer. No claim by way of damages/compensation shall lie against the Developer in case of delay in handing over possession of the flat on account of the said reasons. The Flat shall be deemed to be completed for the purpose of this clause/agreement when the Developer submits application/completion plans to authorities for obtaining completion certificate, which may be for the Complex as a whole or in parts. Possession of the Flat would be given only on clearance of the entire dues payable by the Builder to the Developer in terms of this Agreement and after execution of the Tripartite Sub-Lease Deed”.
14. It is admitted position that the construction as on date is also not complete. It is not the case of OP that the delay in completion of project is due to force majure condition or restraints/restrictions from any court/authority or reasons beyond the control of OP. In the affidavit of the OP it is stated that the OP is trying its best to complete the construction. However, certain date is not given in the affidavit as to when the construction is likely to be completed. Even at the time of arguments Ld. counsel for OP is unable to give any date by which the construction is likely to be completed. Further, upto what stage construction is complete is also not stated in the affidavit. Period of more than 5 years from the agreed date of delivery of possession is already over. The complainant is a senior citizen. He is not expected to wait indefinitely for the completion of the flat. There is a deficiency in service on the part of OP.
15. Ld. counsel for OP has relied upon clause 10(c) of the Agreement Ex CW1/1 to contend that the rights of complainant are fully protected. The aforesaid clause reads as under:
(c) In case of delay in construction of the Flat beyond the period as stipulated subject to force majeure and other circumstances as aforesaid under clause 10 (a), the Developer shall pay to the Buyer compensation @Rs. 53.82/- (Rupees Fifty three and paise eighty two only) per sq. meter or @ Rs. 5/- (Rupees Five only) per sq. ft. of the super area of the Flat per month for the period of delay. Likewise, if the Buyer fails to settle the final account of the Flat within 30 days from the date of issue of the final call notice, the Buyer shall be liable to pay to the Developer holding charges @ Rs. 53.82/- (Rupees Fifty three and paise eighty two only) per sq. meter or @Rs. 5/- (Rupees Five only) per sq. ft. of the super area of the Flat per month on expiry of 30 days notice”.
The aforesaid clause is not applicable in the facts and circumstances of the present case as the complaint is not asking for possession. The money was paid in 2007. As stated above, even as on today construction is not complete. The stand of OP in written arguments is that, it is trying to revive the project. The complainant is not supposed to wait indefinitely. The prayer of complainant for refund of money with interest for refund of money is justified.
16. Further in Santosh Johari and Ors. (Supra) there was substantial delay in handing over the possession of the flat. A similar term was there in the flat buyer Agreement. The National Commission has held the same as unreasonable and unfair. The relevant portion of the judgment is reproduced as under:
11. “___________________________________________
___________________________________________
___________________________________________
___________________________________________
Since the contracts of all the big builders contain a terms for payment of a specified sum as compensation in the event of default on the part of the builder in handling over possession of the flat to the buyer and the flat compensation offered by all big builders is almost a nominal compensation being less than 25% of the estimated cost of construction per month, the flat buyer is left with no option but to sign the Buyer’s Agreement in the format provided by the builder. No sensible person will volunteer to accept compensation constituting about 2-3% of his investment in case of delay on the part of the contractor, when hi is made to pay 18% compound interest if there is delay on his part in making payment”.
17. OP also cannot forfeit the earnest money being 15% of the basic price as is contended specially when there is no breach of terms and conditions of Agreement Ex CW1/1 on the part of the complainant. Rather the breach is on the part of the OP as the OP has not been able to complete the project within the stipulated period as was agreed. The delay is also not for the circumstances beyond the control of the OP as is held above. The reasons given for the delay i.e. global recession are beyond the purview of the Agreement. Further, no material is placed on record. The contention of OP for forfeiting of earnest money is rejected.
18. On the alleged ground of global recession OP can’t retain the hard earned money of the complaint. Once OP has collected the money, it ought to have completed the construction as was agreed.
19. A sum of Rs. 13,81,687/- is admittedly received by OP from complainant in the year 2007. OP is using the money of a retired senior citizen without any hindrance. In return nothing is given to him. The same amounts to unfair trade practice also. The complainant has sent legal notice Ex CW1/3 & reminder dated 12.06.2010 to OP but money is not refunded. The complainant is forced to file the present complaint case against OP. The complainant has undergone physical harassment and mental agony on account of omission and commission on the part of OP for the part more than 5 years. The OP has deprived the complainant of making alternate arrangement. In the facts and circumstances of the present case, refund of amount deposited by the complainant with 12% interest will meet the ends of justice. The amount of 12% interest shall take care of compensation also.
20. In view of above discussion, we dispose of the complaint with the following directions to the OP:
(i) To refund to the complainant an amount of Rs. 13,81,687/- along with interest @ 12% p.a. from the date of deposit i.e. 23.05.2007 till payment. Since 12% interest is awarded on deposited amount, there is no separate order for compensation.
(ii) OP shall pay litigation costs of Rs. 50,000/- to the complainant.
(iii) The aforesaid payments be made to the complainant within 30 days of receipt of the order.
A copy of this judgment be provided to the parties free of costs as per rules.
File be consigned to record room.
