Delhi

StateCommission

CC/10/178

PANKAJ GUPTA - Complainant(s)

Versus

PARSVNATH DEVELOPERS LTD. - Opp.Party(s)

14 Sep 2016

ORDER

IN THE STATE COMMISSION : DELHI

(Constituted under Section 9 of the Consumer Protection Act, 1986)

 

Date of Decision:14.09.2016

 

Complaint Case No.178/2010

 

In the matter of:

 

1. Shri Pankaj Gupta

S/o Shri V.P. Gupta,

R/o 314, Great India Apartments,

Plot No.15, Sector-6, Dwarka,

New Delhi-110075.

 

2. Smt. Lakshmi Devi Gupta

W/o Shri V.P. Gupta,

R/o 314, Great India Apartments,

Plot No.15, Sector-6, Dwarka,

New Delhi-110075.

 

 

                        ....Complainant

 

Versus

 

 

M/s. Parsvnath Developers Ltd.,

6^th Floor, Arunachal Building,

Barakhamba Road,

New Delhi-110001.

 

….….....Opposite Party

CORAM

 

Justice Veena Birbal, President.

Ms. Salma Noor, Member.

 

 

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. This is a complaint under Section 12 of the Consumer Protection Act 1986 (in short “the Act”) filed by the complainants.
2. Briefly stated facts of the complaint are that the OP builder in the year 2007-08 had floated a new Township project, namely, Parsvnath City, on NH-8, at Dharuhera, Haryana and advertised for sale of villas in the said project.  It is stated that the complainants after seeing the advertisement in leading Newspapers booked an ‘Elite Villa’ on 240 Sq. Yds plot with the OP in their joint names vide application dated 22.4.2008 in Plan ‘A’ i.e. Cash Down Payment Plan (with 10% rebate) and made payment of Rs.5,35,000/- on 29.04.2008 vide three cheques, the details of which have been given in the complaint. Thereupon the OP had allotted an Elite Villa bearing No. B-141 to the complainants. 
3. It is stated that the then Site Manager of the OP had assured that the possession will be given in 18 months from booking and suggested for arranging loan from bank through ING Vysya Bank as the said bank had already approved the aforesaid project. It is alleged that the OP had made a delay in supplying various documents of the property required for processing the loan by the bank.  It is alleged that on 23.06.2008, the OP had supplied the necessary documents, thereafter, on 27.06.2008 the bank sanctioned the loan of Rs.38,80,600.00 and issued a demand draft in the name of the OP. The aforesaid loan amount has been received by the OP vide receipt dated 03.07.2008. 
4. It is alleged that the OP has failed to deliver the possession of the Villa as promised. It is alleged that in response to several mails sent by the complainants from November 2009 seeking status of the project, the OP has replied by way of an e-mail dated 02.02.2010 stating therein that the delivery would be made by the end of 2011.
5. It is alleged that the money has been taken by the OP for their own gain and there is no development in the project and the possession of the Villa has not been given to the complainant till date.  No construction has come up in sight after the plinth level of the said Villa.  The complainants have alleged that they have visited the site on 28.03.2010 and 04.04.2010 and found that there is no construction on the plot earmarked for the complainants.  It is alleged that on account of non-delivery of possession, the complainants have suffered mental agony and they are also paying interest on loan taken from the bank.  The complainants are also paying house rent due to non-delivery of the Villa.  The complainants have paid around Rs.44,15,600/- i.e. 95% of the cost of the Villa including the amount of Rs.50,000/- as Club membership fee, and despite that possession has not been delivered to them till date.
6. It is alleged that due to non delivery of the possession of the Villa, the complainant sent a legal notice dated 19.04.2010 to the OP calling upon it to deliver the possession and pay the amount demanded in the notice. However, OP neither delivered the possession of Villa nor responded to the said notice, as such the present complaint is filed making the followings prayers:-

1. To deliver the possession of Elite Villa No. B-141 in Parsvnath City, Dharuhera, NH-8, District Rewari, Haryana;

 

2. To pay a sum of Rs.24,50,746/- (Rs. Twenty Four Lakhs Fifty Thousand Seven Hundred Forty Six only) on account of interest @ 24% (calculated upto 31.5.2010) on Rs.44,15,600/- being the 95% of the price of the Villa (including an amount of Rs.50,000/- as club membership fee) and future interest also;

 

3. To pay a sum of Rs.15,00,000/-(Rs. Fifteen Lacs) on account of compensation/damages by the complainants;

 

4. Costs of the complaint be awarded in favour of the complainants;

 

 

7. OP opposed the complaint by filing written statement. Preliminary objection has been taken in the written statement alleging that the present case involves complex and complicated questions of facts and law and  cannot be decided in summary jurisdiction of the Consumer Forum. On merits it is admitted that a Villa was booked by the complainant in the project of OP as is stated above. The amount paid by the complainants is not denied specifically. It is stated that the payment received from the complainant are matter of record. It is stated that the complainant has signed Villa Buyers Agreement dated 02.06.2008 (in short, ‘The Agreement’) and they are bound by the terms and conditions of the said Agreement.  It is stated that as per terms and conditions of the Agreement, the project was likely to be completed in a period of 24 months from the date of commencement of construction. However, due to the phenomenon of global recession which effected the real estate sector in India, the development work at the site could not be completed. It is alleged that it is the endeavour of the OP to handover the possession of the Villa at the earliest. It is further alleged that in the event of delay rights of the complainants are protected under the terms of the Agreement and OP has relied upon clause 8 (c) of the aforesaid Agreement. It is stated that as per the aforesaid clause, the complainant is entitled to a compensation of Rs.5/- per sq. Ft. Of the super area for the period of delay and as such the complainants are fully protected.  It is denied that the OP has received money from the complainant for its own gains as is alleged. It is denied that there is deficiency on the part of the OP and prayer is made for dismissal of the complaint.
8. Rejoinder is filed by the complainant to the written statement of the OP wherein the allegations made by the OP against complainants are denied. The complainants have reiterated averments of the complaint case.
9. Both the parties have filed evidence in the form of   affidavits. On behalf of the complainants affidavit of Sh. Pankaj Gupta i.e. Complainant No. 1 is filed wherein contents of complaint cases are reiterated on oath.  The complainant No.1 has also filed necessary documents relating to the booking of the villa and demands having made by OP.  The same are exhibited as Ex. CW1/1 to Ex. CW 1/10. In the aforesaid affidavit, e-mails sent to the OP for finalization of housing loan are exhibited as CW-1/12 to Ex-1/17. The demand letter dated 6.5.08 sent by the OP to the complainants informing them that delay in demand was attracting interest @24% is exhibited as Ex. CW1/18. The complainant No.1 has also exhibited copy of letter dated 14.6.08 as CW 1/19 and receipt as Ex. CW1/20. The complainant No.1 has also written to OP for waiver of interest which is Ex. CW1/14 as well as sent e-mails i.e. CW-1/21 to CW-1/26. The complainant No.1 has also exhibited other e-mails sent to OP i.e. Ex. CW1/29 to Ex. CW1/31 for knowing the status of the project. The complainant has also placed on record Ex. CW1/32 which was a complaint sent by them to District Grievances Redressal Forum, office of Deputy Commissioner, Rewari (Haryana). The complainant No.1 has further stated that on visiting the site on 28.3.10 and 4.4.10, they confirmed their visit to OP vide e-mail Ex. 1/34. It is further stated that on account of non delivery of possession of Villa, their plan for shifting has been jeopardized. They are paying interest on loan. The detail of paying of interest on loan is also stated in the affidavit. It is also stated that 95% of the costs i.e. Rs.44,15,600/- including a sum of Rs.50,000/- as club membership have been paid to the OP. Besides the aforesaid amount an additional amount of Rs.11,236/- for processing and Rs. 82,377/- for insurance premium has also paid. It is further stated that a legal notice EX. 1/35 was sent to the OP and the postal receipt is exhibited as Ex. CW1/36 but no response is given. The complainant No.1 has also exhibited various certificates showing the interest amount having being paid to the bank towards the repayment of the loan.
10. The affidavit of complainant No. 2 is also filed wherein also the complaint case is reiterated on oath.  The documents stated in the affidavit of complainant No.1 are also discussed in the affidavit of complainant No.2.
11. OP has filed evidence by way of affidavit of Sh. Madan Lal Dogra, Dy. General Manager (Commercial) wherein contents of the written statement are reiterated on oath.
12. The complainants have also filed another affidavit dated 6.10.15 by way of additional evidence wherein it is stated that OP is not having a valid license since the year 2009 to develop the aforesaid project and the development work is at a standstill.  It is stated that application for renewal of license has already been rejected by the DTCP, Haryana vide letter dated 23.07.2013 and the same status continues as on today.  It is stated that in these circumstances, complainants are praying for the refund of their amount along with interest. 
13. The OP has also filed additional affidavit of Shri Ramesh Chander Gupta, GM on 25.08.2015 reiterating the stand that due to global recession, the work could not completed.  It is further stated in affidavit that the possession of the villa is likely to be handed over within the period of 1-1.25 years. 
14. Ld. Counsel for complainants has contended that OP has failed to fulfill its commitment and did not hand over the possession within 24 months as agreed between the parties vide Agreement referred above. It is contended that there is no likelihood of the same being completed in near future.  It is contended that 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 8(a) of the Agreement i.e. subject to force majeure and restraints/restrictions from 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 the 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 the project. It is submitted that frivolous stand is taken by OP in this regard. It is submitted that money deposited by complainants be refunded with 24% interest along with suitable compensation and costs of litigation.
15. Ld. Counsel for the OP has 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 8(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.
16. We have heard Counsel for the parties and perused the material on record.
17. 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.
18. It is admitted position that the aforesaid complainants have booked an ‘Elite Villa’ on 240 Sq. Yds. with OP in a new township at NH-8 at Dharu Hera, Haryana on Parsvnath City and the OP issued allotment letter alloting Elite Villa bearing No. B-141 to the complainant. It is also admitted position that the complainants took loan from the bank for the purpose of meeting demand of the OP. The complainants have stated having paid to OP Rs.5,35,000 at the time of booking and thereafter a loan of Rs.38,80,600/- was sanctioned by the ING Vysya Bank and the said bank issued a demand draft of Rs.38,80,600/- in the name of OP on 27.6.08. There are receipts on record from the OP acknowledging the aforesaid payments. The Agreement dated 2.6.08 having been executed between the parties is also admitted.  The same is also perused. As per clause 8(a) of aforesaid Agreement, it has been agreed between the parties that the OP shall endeavour to complete construction of the Villa within a period of 24 months from the date of commencement of the construction after receipt of sanction of building plan/revised building plan and other approval of the concerned authorities as required, subject to force majeure, restraints or restrictions from any court/authorities.  The aforesaid clause is reproduced as under:-

          “The Developer shall endeavour to complete the         construction of the Villa within a period of twenty    four (24) months from the date of commencement of           construction, after receipt of sanction of building       plans/revised building plans and other approvals of      concerned authorities as may be required, subject to       force majeure, restraints or restrictions from any        courts/authorities, non availability of building      materials, disputes with contractors/work force etc.           And circumstances beyond the control of the      Developer and subject to timely payments by the      Buyers. For the purposes of this clause/agreement           the date of submission of application with the   competent authority for obtaining reckoned as the date of completion of development of the Colony. No           claim by way damages/compensation shall lie against the developer in case of delay in handing   over possession on account of any of the said     reasons and the Developer shall entitled to    reasonable extension of time for completion of the           Villa.”

19. It is admitted case that the OP has failed to complete the construction within the period of 24 months as agreed under clause 8(a) of the Agreement reproduced above. The perid of 24 months had lapsed in June 2010. The present complaint is filed immediately thereafter. Even at the stage of final arguments, the construction has not been completed. The complainant has placed on record the photographs of the Villa under construction. The construction is nowhere near completion. At the time of arguments, Ld. Counsel for OP has failed to give any specific period as to when the construction is likely to be completed. On seeing the pictures, construction is found standstill. The stand of the OP is that the project could not be completed on account of recession in the real estate market. The terms of the Agreement between the parties do not justify the delay in the completion of the project on the aforesaid ground. The OP was duty bound to complete the construction irrespective of the recession in the market. It is not the case of OP that construction could not be completed due to force majeure conditions or restrains/restriction from the court or authorities for which the delay can be considered. There is a substantial delay in the construction of the Villa and OP even after 8 years of receipt of money has not been able to complete the construction.  The same amounts to deficiency in service on the part of OP. In these circumstances, the complainants are justified in seeking refund of the amount which they have paid to the OP.
20. The complainants are seeking refund of the amount along with 24% interest by contending that they have taken loan from the bank and are paying interest ranging from 13% to 14% p.a. interest towards repayment of loan to the bank. The OP is relying on clause 8(c) of the Agreement and has contended that the complainants are not entitled for interest @ claimed by them and the complainants are fully protected under aforesaid clause. It is contended that the refund can be made to them along with compensation as per clause 8(c) of the Agreement. The said clause reads as under:-

“8(c)      In case of delay in construction of the Villa beyond the period stipulated subject to forces majeure and other circumstances as aforesaid under clause 8(a), the Developer shall pay to the Buyer compensation @Rs.5/- (Rupees Five only) per sq. Ft. (Rs.53.82/- per sq. Meter) of the super area of the Villa per month for the period of delay. Apart from the said compensation and Developer shall not be liable to any compensation/damages for the period of delay in offering possession. Likewise, if the Buyer fails to settle the final account and to execute sale deed and take possession of the Villa within 30 days from the date of issue of the final call notice/offer to hand over possession, the Buyer shall be liable to pay to the Developer holding charges @Rs.5/- (Rs. Five only) per sq. Ft. (Rs.53.82/- per sq. Meter) of the super area of the Villa per month on expiry of 30 days notice and shall also become liable to pay any charges, levies, taxes and maintenance charges in respect of the Villa irrespective of the fact that the Buyer has not been in enjoyment of the same.”

21. The aforesaid clause is not applicable to the facts and circumstances of the present case as the complainants are not willing to accept the possession due to huge delay. Further OP is also not in a position to handover the possession. The aforesaid clause is not applicable where on account of delay on the part of the OP, the complainant is not interested in the Villa and is interested in the refund of his amount which he had paid to the OP. The money was paid in the year 2008 and as noted above even as on today construction is nowhere near completion. Further in view of the terms and conditions of the Agreement, in case there is any delay on the part of the complainant in making payment, the OP has a right to recover interest from the buyer @24% p.a.  In these circumstances, such a clause, amounts to an unfair trade practice because if there is delay on the part of buyer in making the payment he has to pay interest @24% to seller and if there is a delay on the part of the seller he will be compensated @Rs.5 per sq. Ft. on the super area.
22. In Santosh Johari & Ors. vs Unitech Ltd., MANU/CF/0364/2015, 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 he has to pay 18% compound interest if there is delay on his part in making payment”.

23. The OP has taken 95% of payment from the complainant in the year 2008 and eight years have passed and construction has not completed as yet. As noted above OP has failed to justify the delay in carrying the construction. The affidavit of the complainants where it is stated that application of OP for renewal of license for developing the project has been rejected has gone unrebutted.  The OP has made a vague statement in the affidavit that possession would be delivered in 1 or 1.25 years without showing any progress in the construction. The hard earned money of the complainant has been retained by the OP for number of years. The same has caused mental agony and harassment to the complainant. The complainants have also taken loan from the bank and have paid higher rate of interest towards repayment. Admittedly as per the Agreement between the parties, the complainant were required to pay interest @24% p.a. in the event of delay on their part in making payment to the OP. In these circumstances the OP should not hesitate in paying interest at the same rate to complainant in the event of non completion of the construction within the time period. Further the complainants cannot get the flat/Villa with the amount with which they were getting in the year 2008. In the similar facts and circumstances the National Commission in CC No. 144/2011 - Subhash Chander Mahajan V. Parsvnath Developers Ltd. decided on 5.5.2014 has passed an order directing the OP for refund of amount with 18% interest besides compensation and litigation costs. In CC No. 232/2014 Puneet Malhotra V. Parsvnath Developers Ltd. decided on 29.1.15 in the similar facts and circumstances wherein there was a fault on the part of the OP in constructing the flat, the order has been passed for refund of amount with 18% interest.
24. In view of the above discussions we allow this complaint with the directions to the OP to refund the amount of Rs.44,15,600/- which the complainants have deposited with them alongwith interest on the said amount @18% p.a. from the date of deposit till the date of refund. The Compensation is included in the grant of interest @ 18% per annum as such no separate order for compensation and litigation of costs is made.
25. The aforesaid payment be made to the complainants within 30 days of receipt of the order.
26. The complaint stands disposed of accordingly.
27. Copy of this judgment be given to the parties free of costs as per rules.

          File be consigned to Record Room.

 

 

 

(Justice Veena Birbal)

•  

 

(Salma Noor)

Member