RESERVED
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
UTTAR PRADESH, LUCKNOW
COMPLAINT NO. 86 OF 2010
Smt. Priyanka Mittal and another ...Complainants
Vs.
Parsvnath Developers Limited and another ...Opposite Parties
COMPLAINT NO. 87 OF 2010
Syed Gufran Ali Alvi and another ...Complainants
Vs.
Parsvnath Developers Limited and another ...Opposite Parties
COMPLAINT NO. 88 OF 2010
Jawahar Bhatia and others ...Complainants
Vs.
Parsvnath Developers Limited and another ...Opposite Parties
COMPLAINT NO. 89 OF 2010
Rajendra Kumar Agarwal and another ...Complainants
Vs.
Parsvnath Developers Limited and another ...Opposite Parties
COMPLAINT NO. 90 OF 2010
Anurudh Lal Rastogi and another ...Complainants
Vs.
Parsvnath Developers Limited and another ...Opposite Parties
COMPLAINT NO. 58 OF 2011
Janmejai Mani Tiwari ...Complainant
Vs.
Parsvnath Developers Limited and another ...Opposite Parties
COMPLAINT NO. 74 OF 2011
Deepak Bhalla ...Complainant
Vs.
Parsvnath Developers Limited and another ...Opposite Parties
COMPLAINT NO. 92 OF 2011
Mr. Himayat Ali and another ...Complainants
Vs.
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Parsvnath Developers Limited and another ...Opposite Parties
COMPLAINT NO. 93 OF 2011
Mr. Mahendra Pratap Singh and another ...Complainants
Vs.
Parsvnath Developers Limited and another ...Opposite Parties
COMPLAINT NO. 94 OF 2011
Mr. Vivek Agarwal and another ...Complainants
Vs.
Parsvnath Developers Limited and another ...Opposite Parties
COMPLAINT NO. 96 OF 2011
Uppasana Malik ...Complainant
Vs.
Parsvnath Developers Limited and another ...Opposite Parties
COMPLAINT NO. 97 OF 2011
Pravin Kumar Goel and another ...Complainants
Vs.
Parsvnath Developers Limited and another ...Opposite Parties
COMPLAINT NO. 98 OF 2011
Avadh Rubber (Prop. Madras Elastomers Ltd.) ...Complainant
Vs.
Parsvnath Developers Limited and another ...Opposite Parties
COMPLAINT NO. 99 OF 2011
Bharti Dixit and another ...Complainants
Vs.
Parsvnath Developers Limited and another ...Opposite Parties
COMPLAINT NO. 100 OF 2011
Jitendra Kumar Agarwal and others ...Complainants
Vs.
Parsvnath Developers Limited and another ...Opposite Parties
COMPLAINT NO. 101 OF 2011
Mohd. Aslam Khan and another ...Complainants
Vs.
Parsvnath Developers Limiteds and another ...Opposite Parties
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COMPLAINT NO. 102 OF 2011
Adil Ehsan ...Complainant
Vs.
Parsvnath Developers Limited and another ...Opposite Parties
COMPLAINT NO. 138 OF 2011
Sangita Manish ...Complainant
Vs.
Chief Managing Director
Parsvnath Developers Limited and another ...Opposite Parties
COMPLAINT NO. 123 OF 2011
Mrs. Sarita Gupta and another ...Complainants
Vs.
Parsvnath Developers Limited and another ...Opposite Parties
COMPLAINT NO. 124 OF 2011
Ashok Kamthan and another ...Complainants
Vs.
Parsvnath Developers Limited and another ...Opposite Parties
COMPLAINT NO. 31 OF 2012
Mrs. Nidhi Srivastava ...Complainant
Vs.
Parsvnath Developers Limited and another ...Opposite Parties
COMPLAINT NO. 32 OF 2012
Ravindra Kumar Singh and another ...Complainants
Vs.
Parsvnath Planet, M/s. Parsvnath Developers
Limited and another ...Opposite Parties
COMPLAINT NO. 49 OF 2012
Mrs. Neera Mittal and another ...Complainants
Vs.
Parsvnath Developers Limited and another ...Opposite Parties
COMPLAINT NO. 103 OF 2012
Nishant Kumar and others ...Complainants
Vs.
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Parsvnath Developers Limited and others ...Opposite Parties
COMPLAINT NO. 130 OF 2012
Dr. Sunil Kumar Singh and another ...Complainants
Vs.
Parsvnath Developers Limited and another ...Opposite Parties
COMPLAINT NO. 01 OF 2013
Sudhanshu Rastogi ...Complainant
Vs.
Parsvnath Developers Limited and another ...Opposite Parties
COMPLAINT NO. 18 OF 2013
Nalin Bhargava and another ...Complainants
Vs.
Parsvnath Developers Limited and another ...Opposite Parties
COMPLAINT NO. 34 OF 2013
Mrs. Jasleen Vishwanathan and another ...Complainants
Vs.
Parsvnath Developers Limited and another ...Opposite Parties
COMPLAINT NO. 35 OF 2013
Deepak Bhalla ...Complainant
Vs.
Parsvnath Developers Limited and another ...Opposite Parties
COMPLAINT NO. 68 OF 2013
Mrs. Indu Singh ...Complainant
Vs.
Parsvnath Developers Limited and another ...Opposite Parties
COMPLAINT NO. 69 OF 2013
Mrs. Poonam Sagar ...Complainant
Vs.
Parsvnath Developers Limited and another ...Opposite Parties
COMPLAINT NO. 175 OF 2013
Umesh Chandra Dixit and another ...Complainants
Vs.
Parsvnath Developers Limited and another ...Opposite Parties
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COMPLAINT NO. 179 OF 2013
Amit Kapoor and another ...Complainants
Vs.
Parsvnath Developers Limited and another ...Opposite Parties
BEFORE:
HON’BLE MR. JUSTICE VIRENDRA SINGH, PRESIDENT
HON’BLE MR. JITENDRA NATH SINHA, MEMBER
Counsel for the Complainant : Sri Sarvesh Kumar Sharma, Sri S S Lal Srivastava,
Sri Vikas Agarwal, Sri Rupendra Kumar Porwal
and Sri Aditya Singh
Counsel for the opposite parties : Sri Rajesh Chadha, Advocate.
Dated : 25-02-2015
JUDGMENT
PER MR. JUSTICE VIRENDRA SINGH, PRESIDENT
All the aforementioned complaints have been filed by respective complainants under the Consumer Protection Act, 1986 against opposite parties Parsvnath Developers Limited with the following prayers almost common in all the complaints, deserving to be considered for decision conjointly in a bunch being based on the common facts. In all the complaints, the reliefs sought as follows commonly are to:-
(a) direct the opposite parties to provide the physical possession of fully finished flat having the area allotted complete in all respect with all necessary amenities and not to raise any further demand.
(b) direct the opposite parties to pay interest @ 24% on the amount deposited by the complainants with effect from the respective dates of deposit till the date of physical possession, along with damages agreed upon by the opposite parties stipulated in the agreement.
(c) direct the opposite parties to pay a sum of Rs.5,00,000/ to 7,00,000/- as damages for committing deficiency in service.
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(d) direct the opposite parties to pay a sum of Rs.5,00,000/- to 7,50,000/- as compensation for mental loss and agony and also the monthly rent that has been paid by the complainant and Unfair Trade Practice and Restrictive Trade Practice.
(e) direct the opposite parties to pay a sum of Rs.5,00,000/- as compensation for the loss of rent occasioned by the complainant.
(f) direct the opposite parties to pay appropriate amount towards rent per month payable with effect from the year 2009 till the physical delivery of possession of flat.
(g) direct the opposite parties to pay the difference in the cost of escalation which shall be incurred at the time of execution of the registered sale deed.
(h) direct the opposite parties to pay separate compensation and damages to the complainants for the loss and inconvenience caused to them by the deficiency in services coupled with Unfair Trade Practice committed by the opposite parties.
(i) direct the opposite parties to pay appropriate punitive/exemplary damages on account of mental agony, harassment and trauma under went by the complainants and on account of delaying tactics and harassment caused to the allottes of the scheme.
(j) direct the opposite parties not to charge any service tax in pursuance of Finance Act, 2010.
(k) allow the complaint and direct the opposite parties to pay a sum of Rs.50,000/- towards cost of the case.
(l) direct the opposite parties to pay an amount of Rs.15,000/- per month payable with effect from June, 2009 till the physical delivery of possession of flat.
(m) any other order which this Commission may deem fit and proper in the circumstances of the case may also be passed.
Briefly stated the facts in dispute in all the complaints are that opposite parties are engaged in the activity of housing construction and accordingly they have launched a project named as “Parsvnath Planet’ situated in Gomti Nagar, Lucknow. The project was demonstrated to be very lucrative and made attractive to the vendees, in order to procure/collect money from the needy persons demonstrating themselves to be excellence in the field of construction activity as compared to other builders and assured the buyers/complainants that it has been duly approved by the Lucknow
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Development Authority and necessary permission has also been obtained from them. The emphasis was made by the opposite parties that the possession of the Unit shall be given within a scheduled period of 36 + 6 = 42 months stipulated in agreements executed in between the parties for the project launched in the year 2006.
The complainants attracted by the promise and assurance of the opposite parties, somehow managed and arranged the money from their personal sources as well as on loan at attractive rate of interest and the hard earned money was paid by them to the opposite parties in a hope that the possession of the units shall be provided to them in the year 2009 and they can leave peacefully in their own houses, since the complainants are living in rented houses. The complainants visited the construction site of the opposite parties after depositing the entire amount, where it was revealed that the construction activities were on halt and the persons available on the site told the complainants that the apartments are likely to be completed till 2015. Even the partial construction done by the opposite parties was defective and did not match the specification provided in the agreement. The complainants were shocked on hearing it and observing the site. The complainants immediately contacted the Area manager, who told the complainants that there is some delay in the construction of the apartment and the apartments shall be ready till June, 2010. The complainants have to repay the amount taken on loan along with interest without getting the possession of the allotted units causing irreparable loss and injury to them. The complainants have come to know that the opposite parties have invested the funds earmarked for this project into their other projects in other city due to which they have not been able to complete the project in time. Besides this it has also come to the light that although the opposite parties had collected huge funds from the buyers but in spite of that the opposite parties have miserably failed to pay the dues of Lucknow Development Authority which forced the Lucknow Development Authority to issue coercive measures against the opposite parties for the recovery of their dues.
The opposite parties M/s. Parsvnath Developers Limited have pleaded that the complainants for the purchase of flats in question have entered into the Flat Buyer Agreement with the opposite parties after going through its various terms and conditions which were understood and agreed upon and thereafter signed by both parties and thus a binding contract was entered into by the parties. Clause 10(a) of the said agreement stipulates that ‘Construction of the flat is likely to be completed within a period of 36 months from the date of commencement of constructions of the
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particular block in which the flat is located, on receipt of sanction of building plan/revised building plans and approvals of all concerned authorities, as may be required for commencing and carrying constructions subject to force majeure, restraints or restrictions etc. and circumstances beyond the control of the developer and subject to timely payment by the buyers in the scheme. Since on account of global economic meltdown and severe global recession, there is some delay in completing the project due to circumstances beyond control of the developer which not only affected the opposite parties, but in particular affecting the real estate sector all over, therefore, in view of these circumstances and as per the said agreement wherein is provided that for circumstances beyond control of the developer no claim/damages shall lie against the developer, as agreed to abide by the parties to the agreement, the said reliefs are not worth allowed to the complainants. The construction completion period is to be reckoned from the sanctions by authorities concerned for commencement of construction of project. Vide clause 10(c) of the said agreement, which stipulates that in case of delay beyond the period as stipulated subject to force majeure and other circumstances as aforesaid under sub clause (a) of clause 10, the developer has assured to compensate for delay as per said clause which will be settled at the time of possession. The opposite parties have already intimated their allottees that it is not in the interest of either of the parties that project is delayed and all efforts for the completion of the project is being made and interest of parties is to remain protected in terms of the flat buyer agreement for the period of delay, if any, in completion of the project. In these circumstances there is no cause of action accrued for filing of the alleged complaint cases, as interest of the parties is already protected by virtue of the flat buyer agreement as aforesaid. Thus relief sought for inter alia of direction for delivery of physical possession of finished flats is premature, particularly since complainants admittedly have been informed about the efforts being made by developer to complete the project. Hence in view of this no case of deficient services is made out and filing the alleged complaints is an harassment to the opposite parties. Alleged complaints are liable to be rejected in limine with costs under section 26 of the CP act being the complaints premature, frivolous and vexatious.
It has also been pleaded in the written statement by the opposite parties that the complainants are defaulters and the interest is still due and payable by the complainants as per their respective accounts. Until such payments are made in totality, including but not limited to payments with regard to maintenance, registration
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fees etc., the possession of the said flat cannot be handed over to the complainants. Further there has been no agreement or understanding towards payment of 24% interest by the opposite parties to the complainants and even otherwise the same does not arise. It is wrong and denied that the complainants have suffered any damages which will necessitate the payment of any compensation, damages and cost. Physical possession of the flats shall be given by the opposite parties to the complainants as soon as the construction is complete and only upon receipt of all outstanding payments from the side of the complainants including Service Tax under the Finance Act, 2010 and fulfilment of all formalities. As per Clause 10(c) of the Flat Buyer Agreement entered into by both parties, in case of delay by the opposite parties, the liability of the opposite parties is limited to Rs.5/- per square feet, per month after 42 months elapsed. The complainants were required to pay instalments in accordance with the terms and conditions of the Flat Buyer Agreement, in order to avoid penal interest and cancellation of allotment. The complainants never paid their instalments in time. The opposite parties never informed the complainants that the apartments were likely to be completed by 2015 as alleged by the complaints. The opposite parties have not caused the complainants any mental agony and stress by its attitude as alleged. It is denied that the opposite parties failed to abide by their promise of providing possession of the flat by January, 2009 as no such promise was given by the opposite parties. The opposite parties have never refused to hand over the physical possession of the respective flats to the complainants as and when the same is ready. It is submitted that the opposite parties have already applied to the authorities for completion/occupancy certificate with respect to Towers bearing nos. 1, 2, 8, 9 and 10 in the month of December, 2012. It is submitted that the opposite party no.1 has a Pan-India presence and the opposite parties have completed work of worth more than Rs. 120 crores at Parsvnath Planet, i.e. the present project alone, besides thousands of crores of rupees in the various projects developed by the opposite parties. Work is also going on in various projects. Hence, no case of misappropriation of funds as alleged by the complainants is substantiated or made out and therefore; the present complaint is liable to be dismissed at the threshold.
Evidence by complainants
Short affidavits in support of complaints sworn by various/respective complainants verifying the contents of paragraphs of the complaints have been filed
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on behalf of the complainants thereby stating that the contents of paragraphs of the respective accompanying complaints are true on the basis of record and their personal knowledge.
The following documents have also been filed on behalf of the complainants in different complaints as annexure of the complaints.
Photocopy of the advertisement dated 27-04-2006.
Photocopy of the respective allotment letters.
Photocopy of the Flat Buyer Agreement executed between the complainants and the opposite parties for respective flats of the complainants.
Photo copies of the receipts of deposits made by the complainants in respect to their respective flats.
Photocopy of letter dated 12-02-2010 written by opposite parties to the complainant regarding complainant would be compensated for delay by way of penalty as per clause 10(c).
Photocopy of the newspaper extract regardidng seal of site, delay in completion, cancellationof allotment etc.
Photocopy of the letter dated 5-5-2011 issued to allottee assuring him that interest shall continue to remain protected in terms of Flat Buyer Agreement.
Photocopy of letter dated 26-06-2010 issued to allottee regarding Levy of Service Tax pursuant to amendment made by the Finance Act 2010.
Photocopy of Tripartite agreement dated 15-01-2008.
Photocopy of letter dated 15-01-2008 Permission to Mortgage.
Photocopy of letter dated 24-02-2010.
Photocopy of payment to rent to landlord namely Sri Charu Chand Joshi alongwith maintenance payment receipt of Kalyan Apartment Owners Welfare Association.
Photocopy of Account Statement of the loan Account .
Photocopy of letter dated 30-12-2011 written by complainant to opposite parties to inform the exact date of possession.
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Evidence by opposite parties
On behalf of opposite parties, affidavits dated 23-09-2013 sworn by Wg. Cdr. MM Johri (Retd.), General Manager and Sri Ajay Kashyap, Additional General Manager (CRM) of Parsvnath Developers Limited have been filed in support of the pleadings of the opposite parties.
The following documentary evidence has also been filed on behalf of the opposite parties.
Photocopy of Board Resolution dated 03-06-2006.
Photocopy of Customer Ledge Account.
Photocopy of letter dated 12-03-2013 issued to the complainant regarding credit of amount of compensation of delay till 31-12-2012 clause 10(c).
Photocopy of advertisement published by the opposite parties.
Photocopy of application form filled by the complainant for allotment.
Photocopy of Flat Buyer Agreement.
Photocopy of letter dated 30-12-2011 written by complainant to opposite parties to inform the exact date of possession.
Photocopy of letter dated 12-02-2010 issued to the complainant assuring him that he will be compensated by way of penalty as per clause 10(c).
Photocopies of letters dated 2-3-2012 issued to the complainant informing that builder is in a position to apply for completion certififate of project in December, 2012 and thereafter possession will be issued.
Photocopies of letters dated 5-5-2011 issued to the complainants assuring them that interest shall continue to remain protected in terms of Flat Buyer Agreement.
Photocopies of letters dated 12-02-2013 issued to the complainants regarding credit of amount of compensation of delay till 31-12-2012 as per clause 10(c).
Photocopy of letter dated 20-02-2010 addressed by the complainant to the opposite party to handover possession in 4th week of Aprial, 2010 and 20-05-2010 addressed by the opposite parties to the complainant that possession as committed will be offer by March, 2011.
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Photocopy of letter dated 16-04-2013, offer letter regarding invitation for fit-outs dated 18-05-2013 and the final statement of accounts.
We have heard Sri Sarvesh Kumar Sharma, Sri SS Lal Srivastava, Sri Vikas Agarwal, Sri Rupendra Kumar Porwal, Sri Aditya Singh learned Counsel for the complainants and Sri Rajesh Chadha, learned Counsel for the opposite parties and perused the entire record.
Learned Counsel for the complainants submitted that this Commission has jurisdiction under the Consumer Protection Act, 1986 to decide and adjudicate the disputes arising in the instant case. The Housing Construction is meticulously provided under Section 2(1)(o) of the Consumer Protection Act, 1986 and any defect or deficiency or Unfair Trade Practice if committed by the builder the same is accountable before this Commission.
We found force in this argument and almost is admitted to the opposite parties too that now it is well settelled in various cases by Hon'ble Supreme Court that the consumer foras under consumer protection act are having the jursdiction to adjudicate the cases of deficiency in service by the builders to the allottees pertaining the feild of housing and we do restrict ourselves to decide these cases in reference to the deficiency of service if any committed by the opposite parties and the complainants are entitled to the relief if any claimed or not.
It is further argued on behalf of the complainants that in the written statement, the opposite parties admitted that they are involved in the activity of ‘business’ which in itself proves that they are working for earning profit and thus they are not akin to the Development Authorities constituted under the Statutory Acts, which works on the foundation of ‘no profit and no loss’ basis. We are convinced with this submission too and no doubt, this differentiation is necessary to be considered for award of damages, compensation if any found worth allowed to the complainants.
The Learned Counsel for the complainants further argued that by way of Advertisement in the year 2005 and in the year 2006, attractive promises and facilities were promised by the opposite parties, so that the persons who are in need of accommodation can apply for the allotment and deposit their hard earned money to get the flat in the scheme. The Flat Buyer Agreements is on the standard format and no alteration and modification in it can be made by the consumers. The Consumer
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Foras can interpret them, so that justice can be done to the consumers for the injury caused to complainants on account of deficiency in services coupled with Unfair Trade Practice committed by the opposite parties for not delivering the possession of the flat within promised period of time. The opposite parties collected the money for the aforementioned project from the public and the money was utilized not in the present project but in some other projects of the company, whereby the delay was committed by them. There was no recession in Lucknow as stated by the opposite parties, rather the cost of the material and other goods were substantially low but the opposite parties kept on charging the price which was on higher side therefore they have earned profit in the period of recession. Thus the plea that the project was delayed on account of recession is not tenable. This Commission in the complaint case of Nishanth Kumar pertaining to the same scheme had directed the builder to produce the entire statement of account of the scheme which has not been complied till date, hence the builder is guilty of concealment of document.
With reference to the above arguments on behalf of complainants, the learned counsel for opposite parties contended that that the delay caused in completion of the construction of the flats is beyond the control of the opposite parties and that the complainants were fully aware of the fact since the time the global recession hit the world economy in 2007. All the NOC’s as were required to commence construction of the flats were made available to the opposite parties in December, 2006. Accordingly the period of 36 months for completing the construction of the flat is to be reckoned from December, 2006 ending in June, 2010 including the grace period of 6 months beyond 36 months. It is further submitted that soon after grant of necessary approvals for commencing construction the opposite parties commenced the construction and continued the construction of the project in full swing. However, due to impact of the global recession, the opposite parties were unable to complete the construction of the flat in the manner as committed to the complainants under the Flat Buyer Agreement. As per the established rules and regulations, the possession of the flat could not have been handed over to the complainants without obtaining all the necessary approvals from various departments. Further the grant of all necessary approvals like approval for connection of water, electricity etc. are dependent on receipt of completion and/or occupancy certificate but since the project underwent the effect of the global recession, the construction of the project could not be completed in time, hence the necessary approvals from the government department enabling the opposite parties to
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tender the possession of the flat to the complainants could not be obtained.
It is also submitted on behalf of opposite parties that the construction of project of the opposite parties is dependent upon the amount of money being received from the booking made and money received henceforth in the form of instalment by the allottees. However, since during the prolonged effect of the global recession, the number of bookings made by the prospective purchasers reduced drastically in comparison to the expected bookings anticipated by the opposite parties at the time of launch of the project, the reduced number of booking along with the fact that several allottees of the project either defaulted in making payment of the instalment or cancelled booking in the project, resulted in less cash flow to the opposite parties causing delay in the construction work of the project.
Looking in to the aforesaid elaborated arguments on various aspects of the given circumstances for their respective cases by both the parties but without discussing each and every circumstance, minute or major aspect of controversy and reason for not providing the possession to the complainant, we are of this view that that this is the bare fact on record that the complainants have not been provided the possession of the flats by the Opposite Parties within the committed/promised period in the Agreement executed in between the parties which has a binding effect on both the parties.
With regard to the agreement in between the parties, it has been contended by the learned Counsel for the complainants that the complainants are entitled for the payment of compensation under the agreement as agreed by the opposite parties under Clause 10(c) and in addition to that the complainants are also entitled for further interest at the rate of 24% with effect from the dates of deposit of the amounts with the opposite parties till the possession of the flat along with damages and punitive damages, since admittedly the opposite parties under clause 5(b) of the agreement read with the advertisement imposed interest at the rate of 24% in shape of penalty upon the defaulting allottes and thus equity demands that the complainants are also entitled for the same rate of interest on the money deposited with the opposite parties together with the agreed compensation under clause 10(c).
Learned Counsel for the opposite parties controverted the arguments of the complainants contending that that the complainants also breached the terms and conditions of the Flat Buyer Agreement as they failed to make the due payments on
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time and until the payment is made in totality including but not limited to payments with regard to maintenance, registration fees etc., the possession of the flat cannot be handed over to the complainants. The complainants are defaulters by nature and have never paid instalments on time, despite several reminders by the opposite parties to pay the instalment in time. The complaints are not maintainable since the complainants have failed to make out a case for filing the complaint. The liability of the complainants and the opposite parties are limited in view of the terms and conditions as stipulated under the Agreement. The complainants had at the time of execution of the Agreement categorically agreed to Clause 10(c) of the Agreement, which provides that in case of delay in construction of the flat the opposite parties shall compensate the complainants with Rs.53.80 per sq. meter or @ Rs.5/- per sq.ft. As per Clause 10(c) of the agreement it is clear that interest of the complainants in case of delay in delivery of possession of the flat has been taken care of, hence there arises no question of payment of interest by the opposite parties to the complainants on their deposits.
After going through the entire contentions of both the parties, facts and circumstances on record, we have arrived on this conclusion that since admittedly, there is an agreement of buyer and purchaser in existence in between the parties, the parties are bound to abide the terms and condition of the agreement. Law is very much clear with this regard as is cited below in various cases by the Hon'ble Supreme Court as well as by Hon'ble National Commission.
Hon'ble Supreme Court in the case of Banglore Development Authority reported in (2007) 6 SCC 711, in the relevant para 10 (b) has held as follows;
10. Where a development authority forms layouts and allots plots/flats (or houses) by inviting applications, the following general principles regulate the granting of relief to a consumer (the applicant for allotment) who complains of delay in delivery or non-delivery and seeks redressal under the Consumer Protection Act, 1986 (“the Act”, for short) (vide Lucknow Development Authority v. M.K. Gupta, Ghaziabad Development Authority v. Balbir Singh and HUDA v. Darsh Kumar, as also Ghaziabad Development Authority v. Union of India):
(b) Where no time is stipulated for performance of the contract (that is for delivery), or where time is not the essence of the contract and the buyer does not issue a notice making time the essence by fixing a reasonable time for performance, if the buyer,
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instead of rescinding the contract on the ground of non-performance, accepts the belated performance in terms of the contract, there is no question of any breach or payment of damages under the general law governing contracts. However, if some statute steps in and creates any statutory obligations on the part of the development authority in the contractual field, the matter will be governed by the provisions of that statute.
Hon'ble National Consumer Dispute Redressal Commission also held in para 10 below, in the case of Subhash Chand Mahajan and others versus Parsavnath Developers Ltd reported in II(2014) CPJ 719 (NC);
10. We find force in the arguments raised by the counsel for the OP, in a measure. The complainants cannot claim interest @ 24% p.a. They are bound by the agreement entered into between the complainants and the OP. It is to be assumed that the parties had signed the agreement with open eyes and after understanding its each and every covenant.
Hon'ble NCDRC in the case of Sahara India Commercial Corporation Ltd. and another. vs. Madhu Babu reported in II(2011)CPJ3(NC) Revision Petition No. 624 of 2007 Decided On: 00.03.2011 has held as follows ;
4. We have carefully considered the submissions of the parties and perused the orders of Fora below. It is not as though the refund is not permissible but the point here for consideration is that the refund, if any, is necessarily to be governed by the contents of Clause 8 of the terms and conditions of the booking of the flat. ..........................................
When there is a written agreement between the parties, it is well settled that the consumer Fora have to consider the relief in the light of such agreement and it is not open to them to add or subtract any of the conditions or words thereof while doing so. In the light of this proposition, which has been upheld through our judgment in R.P. No. 497 of 2006 (supra), there is No. doubt that the fora below exceeded their jurisdiction and committed an error in directing the OP to refund the amount of Rs. 28,050 which is contrary to provisions of Clause 8 of the agreement. Clause 8 also provides that interest on refunds is not permissible. In the circumstances, the impugned order cannot be sustained in the eye of law. The same, therefore, has to be set aside. Consequently, we allow the revision petition and set aside the impugned
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order of the State Commission with the parties bearing their own costs.
Hon’ble Supreme Court in the case of D.S. Thimmappa v. Siddaramakka, (1996) 8 SCC 365 at page 366, in respect to the essence of the time to the agreement, has held that it is settled law that unless the deed of agreement of sale stipulated a date for performance, time is not always of the essence of the contract.
In the case of McDermott International Inc. v. Burn Standard Co. Ltd., (2006) 11 SCC 181 at page 217, Hon'ble Supreme Court has held as follows ;
85. The question which further arises for consideration is as to whether the respondents having proceeded on the basis that time was of the essence of the contract, it was bound to issue a notice of repudiating the contract subject to reservation as regards its claim of damages. MII, however, states that it had never raised a contention that the time was of the essence of the contract, but the claim arises in view of the delay caused in completion of the contract for a period of 34 months and consequent escalation of costs. The price payable in terms of the sub-contract did not adequately cover increased costs expended by MII. On a plain reading of the provisions of Section 55 of the Indian Contract Act, it is evident that as the parties did not intend that time was to be of the essence of the contract on the expiry whereof the contract became voidable at the instance of one of the parties, but by reason thereof the parties shall never be deprived of damages.
86. We may notice that BSCL had never pleaded before the arbitrator that the time was of the essence of the contract. In construction contracts generally time is not of the essence of the contract unless special features exist there for. No such special features, in the instant case, have been brought to our notice.
88. This Court in Hind Construction v. State of Maharashtra [(1979) 2 SCC 70] stated: (SCC pp. 76-77, paras 7 & 8)
“7. … that question whether or not time was of the essence of the contract would essentially be a question of the intention of the parties to be gathered from the terms of the contract. … (See Halsbury's Laws of England, 4th Edn., Vol. 4, para 1179).
8. … even where the parties have expressly provided that time is of the essence of the contract such a stipulation will have to be read along with other provisions of the contract and such other provisions may, on construction of the contract, exclude the inference that the completion of the work by a particular date was intended to be
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fundamental; … (See Lamprell v. Billericay Union [(1849) 3 Exch 283 : 18 LJ Ex 282] Exch at p. 308; Webb v. Hughes [(1870) LR 10 Eq 281 : 39 LJ Ch 606 : 18 WR 749] ; Charles Rickards Ltd. v. Oppenheim [(1950) 1 KB 616 : (1950) 1 All ER 420 (CA)] .)”
In the light of the law as aforesaid, we are further of this view as we have stated earlier too that we need not to go to the elaborate discussion on each and every part of the minute issues irrelevant raised by the parties in their pleadings making rival allegations having no impact on the main issue of allotment of the flats and possession thereof to the allottees and we are concerned only to the aspect of agreement in between the parties in this regard as the execution of agreement is an admitted fact of both parties.
Bare facts on record of these cases are that the complainants have been allotted the respective flats mentioned in the respective complaint of the respective complainant. Admittedly the opposite party could not handover the possession of the flat concerned within the stipulated time in the agreement. Leaving apart the facts and issues pertaining to the entire amount has been paid by each and every complainant to the opposite parties or some of the complainants have been the defaulters, since, every complainant is under obligation and is bound to pay the amount as per terms and conditions agreed in between the parties and similarly the opposite parties since have to fulfil their obligation as is the law laid down aforesaid, this commission have to consider the reliefs claimed by the complainants in these complaints in the light of alleged written agreement in between the parties and it is not open to us to add or subtract any condition or word in the agreement. The relevant terms and conditions of the agreement in this regard are as under;
Clause 5 (b)
In exceptional circumstances, the Developers may, in their sole discretion, condone the delay in payment by charging interest at the rate of 24% per annum on the amounts in default. In the event of the Developers waiving the right of forfeiture and accepting payment with interest, no right, whatsoever, would accrue to any other defaulting Flat Buyers.
Clause 10(a)
Construction of the Flat is likely to be completed within a period of thirty six (36)
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months of commencement of construction of the particular Block in which the Flat is located with a grace period of six (6) months, on receipt of sanction of building plans/revised building plans and approvals of all concerned authorities including the Fire Service Deptt., Civil Aviation Deptt., Traffic Deptt., Pollution Control Deptt., as may be required for commencing and carrying on construction 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 Developers and subject to timely payments by the Flat Buyers in the Scheme. No claim by way of damages/compensation shall lie against the Developers in case of delay in handing over possession on account of the said reasons. The date of submitting application to the concerned authorities for issue of completion/part completion/occupancy/part occupancy certificate of the Complex shall be treated as the date of completion of the Flat for the purpose of this clause/agreement.
Clause 10(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 sub-clause(a) above with a grace period of 6 months, the Developers shall pay to the Buyer compensation @ Rs.53.80 (Rupees Fifty Three and Paise Eighty only) per sq. meter or @ Rs.5/- 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 and to take possession of the Flat within 30 days from the date of issue of the final call notice/offer to handover possession by the Developers, the Buyer shall be liable to pay to the Developers holding charges @ Rs.53.80 per sq. meter or @ Rs.5/- per sq. ft. of the super area of the Flat per month on expiry of 30 days notice.
Perusal of the above said provisions in the agreement made and agreed by both the parties revealed that a binding contract was entered into by the parties. Vide Clause 10(a) of the said agreement it is stipulated that ‘Construction of the flat is likely to be completed within a period of 36+6=42 months from the date of commencement of constructions of the particular block in which the flat is located, on receipt of sanction of building plan/revised building plans and approvals of all concerned authorities’ as may be required for commencing and carrying constructions subject to force majeure, restraints or restrictions etc. and circumstances beyond the
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control of the developer. The complainants have, at the time of execution of the Agreement categorically agreed Clause 10(c) of the Agreement, which provides that in case of delay in construction of the flat the opposite parties shall compensate the complainants with Rs.53.80 per sq. meter or @ Rs.5/- per sq.ft. As per Clause 10(c) of the agreement it is clear that interest of the complainants in case of delay in delivery of possession of the flat has been taken care of with mutual consent of the parties and time had not been the essence of the agreement as due to thereof, none of the party seems to have opted to repudiate the agreement, therefore, none of the party can go beyond the terms and conditions of the agreement, for which they are bound to abide as it is to be assumed that the parties had signed the agreement with open eyes and after understanding its each and every covenant.
Hence in our view, since the complainants have sought the relief for possession of the flats by way of enforcement of the agreement and have not opted repudiation of the agreement nor have sought refund of their money along with interest and compensation, therefore, this litigation simpliciter revolves around the agreement along with consequential reliefs for violation of terms and conditions by Opposite parties qua violation of it (if any) by complainants as is claimed by the opposite parties too and this litigation cannot be equated with the litigation dealt by Hon'ble NCDRC in the case of Subhash Chander Mahajan and Abhishek Kumar Dwivedi Versus Parsvnath Developers Ltd Decided on May 5, 2014, reported in 2014 SCC OnLine NCDRC 11: (2014) NCDRC 12, which is vehemently referred by the complainants to be considered to allow their complaints for the reliefs of interest and compensation claimed by them. Had there been the cases of the complainants too, seeking their money to be refunded due to stoppage of the construction as had been there in that case where it was alleged that the construction of the said premises was stopped in January, 2008 for the reasons best known to the OP, the position of litigation between the parties before us too, would have been similar to be decided taking recourse of the law as is dealt in that case.
Here in these cases before us, the facts are more akin to the facts of cases dealt by Hon'ble Supreme Court, which are as follows.
Bangalore Development Authority v. Syndicate Bank,
(2007) 6 SCC 711, wherein, with regard to deficiency in service for delay in delivery of possession, principles pertaining to award of interest and compensation under
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various situations that may arise, have been summarised :—
The situations being such as: when time for delivery of possession is stipulated, and when it is not;
Where no time is stipulated for performance of the contract (that is for delivery), or where time is not the essence of the contract and the buyer does not issue a notice making time the essence by fixing a reasonable time for performance, if the buyer, instead of rescinding the contract on the ground of non-performance, accepts the belated performance in terms of the contract, there is no question of any breach or payment of damages under the general law governing contracts. However, if some statute steps in and creates any statutory obligations on the part of the development authority in the contractual field, the matter will be governed by the provisions of that statute.
Where an alternative site is offered or delivered (at the agreed price) in view of its inability to deliver the earlier allotted plot/flat/house, or where the delay in delivering possession of the allotted plot/flat/house is for justifiable reasons, ordinarily the allottee will not be entitled to any interest or compensation. This is because the buyer has the benefit of appreciation in value.
The Commission also assumed that mere delay automatically meant deficiency in service and in all such cases, the allottee will be entitled to interest at 18% per annum from the date of payment till date of delivery. There cannot be uniform award of interest at 18% per annum in all cases and in cases of complaints of deficiency in service by a development authority relating to allotment of plots/flats, the principles laid down in Balbir Singh, (2004) 5 SCC 65, have to be applied.
Furthermore, where the grievance is one of delay in delivery of possession, and the development authority delivers the house during the pendency of the complaint at the agreed price, and such delivery is accepted by the allottee complainant, the question of awarding any interest on the price paid by him from the date of deposit to date of delivery of possession, does not arise. The allottee who had the benefit of appreciation of price of the house, is not entitled to interest on the price paid.
The loss caused to an allottee or buyer on account of the delay in delivery is the rental income which the houses would have fetched if they had been delivered earlier, from
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the agreed due date to date of actual delivery of possession. Alternatively, it is the rent paid by the respondent for the houses taken on lease due to non-availability of the allotted houses.
The respondent did not produce any document to show that it paid Rs 3000 per month per house for similar houses during the relevant period for which loss due to delay had to be reckoned i.e. between 1991 and 1997. Nor did it produce any evidence to show that Rs 3000 was the prevailing rent for similar houses. It is not the case of the respondent that documentary evidence for payment of rent was not available. Where documentary evidence was available, but not produced, obviously a mere statement in the affidavit cannot be the basis for award of damages.
GDA v. Balbir Singh, (2004) 5 SCC 65, wherein the Apex Court has held as follows;
Where an allotment is made, price is received/paid but possession is not given within the period set out in the brochure, the Commission/Forum would then need to determine the loss. Loss could be determined on basis of loss of rent which could have been earned if possession was given and the premises let out or if the consumer has had to stay in rented premises then on basis of rent actually paid by him. Along with recompensing the loss, the Commission/Forum may also compensate for harassment/injury, both mental and physical. Similarly, compensation can be given if after allotment is made there has been cancellation of scheme without any justifiable cause.
That compensation cannot be uniform can best be illustrated by considering cases where possession is being directed to be delivered and cases where only monies are directed to be returned. In cases where possession is being directed to be delivered 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 returned then the party is suffering a greater loss inasmuch as he had deposited the money in the hope of getting a flat/plot. He is being deprived of that flat/plot. He has been deprived of the benefit of escalation of the price of that flat/plot. Therefore the compensation in such cases would necessarily have to be higher.
Haryana Urban Development Authority vs Raje RamI (2009) CPJ 56 (SC),
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wherein Hon'ble Supreme Court held that where possession given at old rate, party has got benefit of escalation in price of land, interest should not be awarded on amounts paid by allottees due to delay in allotment.
Hon'ble NCDRC in a case of Ashok Khanna versus GDA IV (2009) CPJ 115 (NC) has held that wherein possession delayed and deficiency in service is alleged and time not essence of contract is proved by Brochure and the complainant not rescinded contract due to non-performance rather accepted delayed performance, the question of breach of contract requiring payment of damages does not arise in such cases. Relevant para 15, 17 and 18 of above case are as follows ;
15. A bare reading of this clause shows that time was not the essence of the contract. The period of 2 years for completion of construction was given on estimate basis. The words “expected to be completed” denotes that the time was not the essence of the contract. Had the time been the essence of the contract, then, the word “expected” would have not been used and, instead, definite period would have been given for delivery of possession.
17. The point before us is as to whether the facts and circumstances of this case warrant a finding of negligence in delivery of possession on the part of GDA necessitating award of compensation by way of interest? The brochure relating to GDA Scheme did not mention any specific date for delivery of possession of the flats. No agreement was entered into between the parties stipulating any time for performance or delivery of flats. The only document on which reliance is being placed by both the parties is the brochure in which the expected date of completion of construction is mentioned to be 2 years. In the absence of any agreement making time to be the essence of the contract or agreement or promise held the GDA cannot be held negligent in providing the service requiring the GDA to either pay compensation or interest on the deposited amount to the petitioner.
18. The petitioner did not rescind the contract on the ground of non-performance. He accepted the delayed performance in terms of the contract. Under the circumstances, the question of any breach of contract or agreement did not arise which could lead to the payment of damages under the general law governing the contract. Petitioner is also not entitled to any interest because he has the benefit of appreciation in value.
In the light of as aforesaid, we are of this view that since the complainants in
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the said project of Housing, after booking of flats have not been provided/delivered possession of the flats by the opposite parties with in time promised in the flat buyer/seller agreement for the reasons whatever may have been, there is deficiency in service of the opposite parties towards the complainants but since the complainants and opposite parties have agreed on some terms and conditions in respect thereof, therefore, both parties being under obligation to abide with the agreement have to honour their commitment as per agreement, hence, complainants are entitled to get the possession of the flats and the opposite parties are under obligation to give possession of the flats to the complainant. Thus in this regard a direction to the opposite parties is required to be given to deliver the possession to the complainants. We find it expedient that whatever may be the contention of opposite parties that they have not given any assurance to the allottees to hand over the possession in the year of 2015 but even than, they can not be set at liberty to linger on the possession sin die on their own choice and they are supposed to hand over the possession as per the deemed intention of the parties at the time of executing the agreement, therefore, we do find it expedient that the opposite parties should have to hand over the possession of the flats to the complainant with in the year of 2015.
So far the question of relief towards interest to be awarded on deposits of the complainants is concerned, we are of this view that A bare reading of the clause 10 (a) of the agreement shows that time was not the essence of the contract. The period of 36 months for completion of construction was given on estimate basis. The words “likely to be completed” denotes that the time was not the essence of the contract. Had the time been the essence of the contract, then, the word “likely” would have not been used and, instead, definite period would have been given for delivery of possession. Since The complainants did not rescind the contract on the ground of non-performance and are merely willing to accept the possession and not the refund of deposits with interest and compensation even after alleged delayed performance in terms of the contract, therefore, under the circumstances, the question of any breach of contract or agreement did not arise which could lead to the payment of damages under the general law governing the contract. The question of breach of contract requiring payment of damages does not arise in such cases. Hence the complainants are hereby not found entitled to any interest on their deposits because they have the benefit of appreciation in value of the flats. Here, since, possession is to be given undisputedly
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at old rate to the complainants as per terms and conditions in the agreement, the complainants have to get benefit of escalation in price of flats. Hence interest has not been found worth award on amounts paid by allottees due to delay in possession.
Here in these cases though allotment is made, price is received/paid (if any of the complainant is defaulter or paid excess amount that has to be dealt individually as per agreement) but possession is not given within the expected period set out in the agreement, but even then, as per case law in the case of Balbir Singh supra, if we determine the loss to the complainants on basis of loss of rent which could have been earned if possession was given and the premises let out or if the complainants had to stay in rented premises then on basis of rent actually paid by them and further to recompensing the loss, for harassment/injury, both mental and physical, we are of this view that in these cases, since the opposite party is crediting a sum @ Rs 53.80 per sq. meter or @ Rs 5 per sq feet per month in the accounts of the complainants towards the delay in possession as compensation for the period calculated from July, 2010 in terms of Clause 10(c) of the Flat Buyer Agreement duly executed between the parties and for which the opposite parties are bound to pay, the grievance of the complainants for the loss of the complainants have already been taking care of.
When we took the individual cases of each of the complainants, we found that there is no evidence on record except in the case of Nalin Bhargav and Sanjai Bhargav complaint case no. 18 of 2013 and in the case of Ravinder Kumar Singh & Ritesh Kumar Singh complaint case no. 32 of 2012, to prove that either the complainants are paying more rent for the residence if any one of them living on rent or the premises allotted to them would have been fetching more rent than the amount is being credited in their accounts or which has to be paid by the opposite parties as per agreement, therefore, in this regard, the loss of all other complainants in this regard stands to have already been covered by way of clause 10(c) in the agreement as is the law that in cases where possession is being directed to be delivered the compensation for harassment will necessarily have to be less because in that way party is being compensated by increase in the value of the property he is getting in comparison to cases where monies are being simply returned then the party is suffering a greater loss inasmuch as he had deposited the money in the hope of getting a flat and he is being deprived of that flat/plot and he has been deprived of the benefit of escalation of the
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price of that flat.
So far the question of complaint case no. 18 of 2013 of the complainants Nalin Bhargav and Sanjai Bhargav is concerned, the record shows that the rent receipts showing the payment of rent to the tune of Rs 14000.00 P.M. from Oct. 2012 to June 2014 have been brought on record, therefore, we are of this view that in this case the complainants are entitled to get the difference of amount of rent paid and the amount credited by the opposite parties in their account vide clause 10(c) of the agreement. In complaint case no. 32 of 2012 of the complainants Ravinder Singh & Ritesh Kumar Singh, merely a receipt of Rs 14000.00 as rent paid for the month of May 2010 has been brought on record and no more payment is proved, therefore, we hold that the complainant in this case is entitled for difference of rent as above merely for the month of May 2010.
However, since the opposite parties alleged that the accounts of the complainants are being credited with the amount as per clause 10(c) of the agreement, we are of this view that where in the account of the allottee, there is no dues to be paid by the allottee to the opposite party, the allottee is entitled to get the amount of credit vide clause 10(c) of the agreement instead of credit in the account of allottee. Hence, the opposite parties are under obligation to issue the statement of account to allottees on their demand to each of the individual complainant and if there is no dues on the allottee as per terms and conditions of the agreement, the opposite parties have to pay the amount of credit in the account of the allottee in cash or by way of cheque or draft to the allotees with interest at least @ 9% P.A. from the date it become due till the payment is made as is the law with regard to interest laid down by Hon'ble Supreme Court in the case of Kaushnuma Begum v. New India Assurance Co. Ltd. (2001) 2 SCC 9 wherein the Apex Court has held as under:
“24. … With a change in economy and the policy of Reserve Bank of India the interest rate has been lowered. The nationalised banks are now granting interest at the rate of 9% on fixed deposits for one year. We, therefore, direct that the compensation amount fixed hereinbefore shall bear interest at the rate of 9% per annum from the date of the claim made by the appellants.”
Therefore we do find some merit in the aforesaid complaints as discussed above
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which deserve to be allowed accordingly.
ORDER
All the aforesaid complaints are hereby partly allowed for the reliefs as follows
- The opposite parties shall hand over the possession of the flats to the complainants within this year of 2015.
- The opposite parties shall issue the statement of accounts to the complainants individually on his demand and if there is no dues on the particular allotee, the opposite parties shall pay the amount of credit vide clause 10(c) of the agreement credited in the account of the allottee in cash or by way of cheque or draft to the allotee with interest @ 9% P.A. from the date it has become due till the payment is made.
- In complaint case no. 18 of 2013 of the complainants Nalin Bhargav and Sanjai Bhargav, the complainants are entitled in addition to get the difference of amount of rent to the tune of Rs 14000 P.M. paid by the complainants and the amount credited by the opposite parties in their account vide clause 10(c) of the agreement w.e.f. Oct. 2012 to June 2014.
- In complaint case no. 32 of 2012 of the complainants Ravinder Singh & Ritesh Kumar Singh, the complainants are entitled in addition to get the difference of amount of rent to the tune of Rs 14000 paid by the complainants and the amount credited by the opposite parties in their account vide clause 10(c) of the agreement for the month of May 2010 only .
The complaints for the rest of the reliefs sought shall be deemed to have been dismissed.
This judgment shall be placed on the record of Complaint Case No. C/86/2010 with its copy to be laid on the record of other 32 complaints.
( JUSTICE VIRENDRA SINGH )
PRESIDENT
( JITENDRA NATH SINHA )
MEMBER
Pnt.
