Delhi

StateCommission

CC/573/2014

SH. GAURAV SAWNEY - Complainant(s)

Versus

PARSVNATH DEVELOPERS LTD. - Opp.Party(s)

03 Jul 2018

ORDER

IN THE STATE COMMISSION: DELHI

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

 

 

Date of Hearing: 03.07.2018

                                                                                                              

                                                                   Date of decision:12.07.2018

 

 

Complaint No. 573/2014

 

 

 

IN THE MATTER OF:

 

Sh. Gaurav Sawney

S/o Sh. K.K. Sawhney

V-55, Rajouri Garden,

New Delhi-110027                                                         ….Complainant                                                                                                   

 

VERSUS

 

        Parsvnath Developers Limited

         

Corporate Office At:

          6^th Floor, Arunachal Building,

          19 Barakhamba Road, New Delhi-110001

 

          Registered Office At:

          Parsvnath Metro Tower,

          Near Shahdara Metro Station,

          Shahdara, Delhi-110032                                               ….Opposite Party

 

HON’BLE  SH. O.P. GUPTA, MEMBER(JUDICIAL)

HON’BLE  SH. ANIL SRIVASTAVA, MEMBER

 

 1.   Whether reporters of local newspaper be allowed to see the judgment?            Yes     

 2.   To be referred to the reporter or not?                                                                   Yes

 

 

Present:       Sh. Manav Kumar, Counsel for the complainant alongwith the father in law of the complainant.

                   Sh. Rakesh Bhardwaj, Counsel for the Opposite Parties.       

 

PER:           ANIL SRIVASTAVA, MEMBER (G)

JUDGEMENT

1.           Non-completion of the construction of the flat booked by Sh. Gaurav Sawhney, for short complainant by the Parsvanth Developers Limited, hereinafter referred to as Opposite Parties, within the agreed time is the root cause of the complaint filed before this Commission under Section 17 of the Consumer Protection Act 1986, (the Act). Point for adjudication in this complaint is whether the prayer of the complainant for refund of the deposited amount is admissible in the facts and circumstances of the case.
2.           Facts of the case necessary for the adjudication of the complaint are these.
3.           The complainant on the advertisements and advancement of the OPs had booked a residential flat on 25.02.2008 for a total sale consideration of Rs. 41,18,400/- by paying 5% booking amount, i.e., Rs. 2,05,920/- and in response thereto an allotment letter was issued by the OPs allotting a flat of the size of 1320 sq. ft. (approximately 122.63 sq.mtr.) to the complainant, bearing number B1-1201 in Tower B-1 in Parsvnath Palacia Project at Greater Noida (U.P). Possession of the flat was agreed to be handed over within 36 months from the date of booking of the flat which means by February 2011, required and necessary formalities having already been done. Flat Buyer Agreement was also executed. Payment as per demand and as per schedule was made to the OPs by the complainants under plan ‘B’ scheme opted for by them.
4.           However the complainants on their visit to the site in April 2012 found that the construction of the flat was at a very nascent stage and possibility of completion of the project in the near future was out of question. Since the construction of the flat booked was not possible to be delivered, the OPs had offered the complainant in July 2012 another flat in their different project, namely, “Parsvnath Privilege” bearing flat no. T4/603, at Greater Noida having an area of 1855 sq. ft. (approximately 172.33 sq. mtr) with the assurance that possession of the flat would be handed over within the stipulated time as agreed to, which offer the complainant accepted and as a consequence thereof a fresh agreement was executed, containing a clause, among others, that the amount paid by the complainant for the flat in the earlier project would be adjusted for the flat offered later. The complainant had also made further payment being the difference of the amount between the two flats.
5.           The complainant has further alleged that the possession of the flat in the project “Parsvnath Privilege” was not delivered despite the agreed time having elapsed despite the amount for the flat having been paid. Worse came to the complainant when the EMI towards the loan he had procured from HDFC Bank for the purchase of the flat was enforced, subjecting him harassment on two accounts, one, he could not get the possession of the flat and, second, he was subjected to financial suffering and hardship owing to HDFC enforcing EMI as per agreement. The complainants allegation is that the delay in handing over the possession of the flat is totally attributable to the negligence of the OPs and thus he is liable to be suitably compensated.
6.           The complainant realising that the OPs would not be able to deliver the possession of the flat, progress of construction of the project being very slow, he made a request for the refund of the amount deposited by him with interest which request was not acceded to, leading to filing of this complaint praying for the relief as under:

 

1. Direct the Opposite Party to refund the entire amount of Rs. 42,76,359.76/- deposited with the Opposite Party for the flat bearing no. B1-1201 in tower B-1 in “Parsvnath Palacia” project, Greater Noida (U.P) and thereafter replaced to flat bearing no. T4-603 in “Parsvnath Privilege” Greater Noida.
2. To pay the interest amount to the tune of Rs. 11,00,000.00 which has been paid by the complainant to HDFC Bank against availed and sanctioned Home Loan to the complainant.
3. To pay interest @ 24% p.a. on the amount already deposited by the complainant with the Opposite Party from the date of actual agreed date of possession of the flat till date.
4. Direct to the OP to pay a sum of Rs. 10,00,000/- towards compensation suffered by complainant due to deficient is service rendered by OP as well as unfair trade practice, mental agony, loss and harassment meted out by complainant at hands of Opposite party.
5. Direct to the OP to pay a sum of Rs. 10,00,000/- towards punitive damages for the deficient service rendered by OP.
6. Pay litigation cost to the complainant.
7. Pass any such other order(s) as it deem fit and proper in the facts and circumstances of the case and in the interest of justice.

 

7.           OP were noticed and in response thereto they have filed written statement, making an averment emphatically that the construction in their project is in full serving, and resisting the complaint on various grounds, namely, the complainant since residing in this own house in Delhi, has transacted in the subject matter for investment which means for commercial purpose and thus he is not a consumer. Secondly, there exists no cause of action as the construction in their project is in full swing. The complaint is pre mature, filed even before the cause of action in the matter arose. Thirdly the subject since involved complicated question of law cannot be adjudicated by the Consumer Forum in a summary proceeding. Fourthly, the bank having not been impleaded as a necessary party, the case is hit by misjoinder of party. Fifthly the delay in construction is owing to worldwide recession, and the worse affected sector is real estate. Besides for the delay done the rights of the complainant have been sufficiently protected, relying on clause 10(c) of the flat Buyer Agreement which says as under:

 

“In case of delay in construction of the flat beyond the period as stipulated subject to force majeure and other circumstances as aforesaid under sub-clause (a) above, the Developer shall pay to the Buyer compensation @ Rs. 53.82 (Rupees Fifty Three and Paise eighty two only) per sq. mtr or @ Rs. 5/- per sq. ft. of the super area of the flat per month for the period of delay………….”

 

Further the project being at Greater Noida this Commission lacks the territorial jurisdiction to hear and to dispose of the case. Finally on merit the OPs have denied the averments made in the complaint.

8.           The complainant has filed rejoinder and affidavit rebutting the contentions raised by the OPs in the written statement and reiterating the averments contained in his complaint. The OPs have also filed their evidence by way of affidavit. Both sides have filed their written arguments in support of the contentions made in the pleadings.
9.           The complaint was listed before us for final hearing on 03.07.2018 when counsel from both sides appeared and advanced their arguments. We have perused the records of the case and given a careful consideration to the subject matter.
10. There being delay in completing the construction the OPs are prima facie negligent in the discharge of their duty. Infact their act amounts to indulging in unfair trade practice. But before we finally adjudicate on the subject we may examine the averments made in the written statement. The averment that the complainant residing at New Delhi has purchased the flat at Greater Noida for the purpose of investment cannot be accepted. No cogent evidence has been placed before us in support of this averment except for this bald plea. It is a trite law that unless it is shown by bringing on record some cogent evidence that the purchaser is engaged in the purchase and sale of flat/ houses on regular basis with a view to make profit by sale of flats/houses, a mere purchase of more than one flat would not per se be sufficient to hold that the purchase was for commercial purpose. This view has been upheld by the Hon’ble NCDRC in the matter of Rajesh Malhotra and ors versus Arcon Developers Pvt. Ltd. and ors reported in II [2016] CPJ 125 (NC). Similar view was held by the Hon’ble NCDRC in Sai Everest Developers and anr versus Harbans Singh Kohli and ors in FA-530/2015.
11. The next objection of the OP is that there exists no cause of action as against them as they have committed no deficiency of service. The complainant has deposited the amount as per the demand raised by the OP. for the purpose of owning a residential unit. This fact is undisputed. OPs have not delivered the unit is also an undisputed fact giving rise to the cause of action in favour of the complainant and against the OPs. The facts whether the cause of action in the matter has arisen or not has been dealt with in detail by The Hon’ble Supreme Court in Kandimalla Raghavaiah and Co versus National Insurance Company Ltd. and another reported in 2009 CTJ 951 (SC) holding as under:

 

“The terms cause of action is neither defined in the Act nor in the CPC but is of wide import. It has different meanings in different contexts that is when used in the context of territorial jurisdiction or limitation or accrual of right to due. Generally it is described as bundle of facts which if proved a admitted entitled the plaintiff to the relief prayed for. Pithily stated, cause of action means the cause of action for which the suit is brought. Cause of action is cause of action which gives occasion for and forms the foundation of the suit.”

Having regard to these facts and the law laid down the objection of the OP to this effect being unsustainable is rejected.

12. Further we are not impressed with the argument of the OPs that the subject involving complicated question of law cannot be adjudicated by the Consumer Forum in summary procedure. This is a complaint seeking adjudication whether the OPs are deficient in service, which subject, in our view, is squarely covered within the ambit and scope of the provisions of the Consumer Protection Act 1986.
13. The next objection of the OPs that the Bank having not been impleaded as a party, the case is hit by the misjoinder of the necessary parties have no legs to stand since financial institutions are neither necessary nor proper party for the adjudication of the complaint of the kind.
14. We are not impressed with the argument of the OP regarding worldwide recession having impact on the real estate in particular since this cannot, by any stretch of imagination be a condition or circumstances leading to the delay in completion of the construction in the project. It belies our conviction that a developer like Parsvnath having earned name through high quality of work, was unable to organise for completion of the project. Hence we have no hesitation in rejecting this defence.
15. The next leg of the argument of the OPs is that the project being at Greater Noida, this Commission lacks the territorial jurisdiction. For this purpose we may advert to the provisions contained under Section 17 (2) of the Act. The said provision of the Act Posits as under:

 

1.  

A complaint shall be instituted in a State Commission within the limits of whose jurisdiction-

1. The opposite party or each of the opposite parties where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain or
2. Any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business or has a branch office or personally works for gain, provided that in such case either the permission of the State Commission is given or the opposite parties who do not reside or carry on business or have a branch office or personally works for gain, as the case may be, acquiesce in such institution, or
3. The cause of action, wholly or in part, arises.

 

16. The registered office of the company being at Delhi, this Commission, relying on the provision of 17(2)(a) of the Act, enjoys the territorial jurisdiction to hear and dispose of this complaint and accordingly the contention of the OP to this effect is also rejected.
17. Now we may examine the matter on merit of the case. Having bestowed our anxious consideration to the facts at hand, we are of the opinion, that the complaint deserves to be accepted. The afore-noted preliminary objections, raised by the Unitech regarding maintainability of the complaint, in complete ignorance of the statutory provisions and the settled legal position, are stated to be outrightly rejected sequentially.
18. In that view of the matter the inevitable conclusion is that on merit there was gross deficiency as defined in Section 2(1) (g) of the Act, on the part of the OPs in its failure to deliver the possession of the flat to the complainant in terms of the agreement. It is trite law that where possession of the property is not delivered within the stipulated period, the delay so caused is not only deficiency in rendering of service, such deficiency or omission tantamount to unfair trade practice as defined in Section 2(r)(ii) of the Act, as well. [Lucknow Development Authority versus MK Gupta [(1994) 1 SCC243]
19. Having arrived at the said conclusion, the core question for consideration is as to how the complainants are to be compensated for the monetary loss, mental and physical harassment they have suffered at the hands of OPs on account of non-delivery of the allotted flat.
20. The provisions of the Act enable a consumer to claim and empower the Commission/Forum to redress any injustice done to a consumer. The Commission or the Forum is entitled to award not only value of goods or services but also to compensate a consumer for injustice suffered by him. The word compensation is of very wide connotation. it may constitute actual loss or expected loss and may extend the compensation for physical, mental or even emotional suffering, insult or injury or loss. Therefore for the purpose of determining the amount of compensation, the Commission/Forum must determine the extent of sufferance by the consumer due to action or inaction on the part of the OP. In Ghaziabad Developement Authority v. Balbir Singh-MANU/SC/0282/2004: (2004) 5 SCC 65, while observing that the power and duty to award compensation does not mean that irrespective of facts of the case, compensation can be awarded in all matters on a uniform basis, the Hon’ble Supreme Court gave certain instances and indicated the factors, which could be kept in view while determining adequate compensation. One of the illustrations given in the said decision was between the cases, where possession of a booked/allotted property was directed to be delivered and the cases where only monies paid as sale consideration, are directed to be refunded. The Hon’ble Court observed, in this behalf, that in cases where possession is directed to be delivered to the Complainant, the compensation for harassment will necessarily have to be less because in a way that party is being compensated by increase in the value of the property he is getting. But in cases where monies are being simply refunded, then the party is suffering a loss inasmuch as he had deposited the money in the hope of getting a flat/plot. He is not only deprived of the flat/plot. He has been deprived of the benefit of escalation of the price of the flat/plot. Additionally, in our view, in such a situation, he also suffers substantial monetary loss on account of payment of interest on the loans raised, depreciation in the money value and escalation in the cost of construction etc.
21. Having noticed the broad principles, to be kept in view while determining the compensation, we may advert to the facts at hand. The complainant had deposited the amount as per schedule as agreed to but the OPs were found wanting in the discharge of their duties.
22. The NCDRC in one case, namely, Emaar MGF Land Pvt. Ltd. another versus Krishan Chander, RP 873/13, decided on 29.09.2014, is pleased to hold as under:

 

“The act of the builder in not handing over the possession of the plot even after collecting the total charges and executing the agreement amounts to deceptive practices, leading to unfair trade practices.”

 

23. The Hon’ble NCDRC in the matter of Merlin Projects Ltd. and Anr versus Pandav Roy and another, FA-128/09, decided on 23.05.2014, is pleased to hold as under:

 

“Appellant to pay to the respondent a sum of Rs. 50 lakh for non-delivery of the possession of the immovable property.”

 

24. The Hon’ble Apex Court in the matter of DDA versus Krishan Lal Nondrayog as reported in IV [2010] CPJ 7 (SC) is pleased to hold as under:

“NCDRC directed the appellant to pay interest @ 18% on account of delay caused in delivery….. The Hon’ble Apex Court affirmed the order but reduced the rate of interest @ 5%, observing that award of interest @ 15% is not interest in substance but it is to compensate the respondents by way of damages for loss in terms of money, mental agony and harassment caused…..

 

25. In yet another case, in the case of HUDA versus Sushila Devi Sharma reported in IV[2011] CPJ 3 (SC) the Hon’ble Apex Court ruled that orders of NCDRC holding that the HUDA not having offered the possession have been deficient, does not call  for any interference and the SLP was dismissed.
26. In view of the discussion done, and on consideration of the facts and circumstances, we direct the OPs to refund the principal amount paid by the complainant, delivery of the possession of the flat since not done within the agreed time, nor a possibility in the near future with simple interest @ 10% p.a. from the date of receipt of the amount till its realisation. These directions may be carried out within a period of two months from the date of receipt of the certified copy of this order.
27. Ordered accordingly. A copy of this order be forwarded to the parties to the case free of cost as statutorily required. File be consigned to record.  

 

 

 

(ANIL SRIVASTAVA)(O.P.GUPTA)

       MEMBER (GENERAL)                                                                           MEMBER (JUDICIAL)

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