Reserved
State Consumer Disputes Redressal Commission
U.P. Lucknow.
Complaint Case No.106 of 2017
Devesh Chandra Pathak. Aged about 48 years,
S/o Late Sri Chandramauli Pathak, R/o T-9/304,
Parsvnath Planet, Vibhuti Khand, Gomti Nagar,
Lucknow. …Complainant.
Versus
1- Parswanath Developers Ltd. (A company
incorporated under the Companies Act, 1956)
Corporate Office at 6th Floor, Arunachal Building
19, Barakhamba Road, New Delhi-110001 and
Registered Office at Parsvnath Tower, Near
Shahdara Metro Station, Shahdara, Delhi-100032
Through its Executive Director.
2- Mr. Pradeep Jain, Managing Director, Parsvnath
Planet, Vibhuti Khand, Gomti Nagar, Lucknow.
3- The General Manager, Parsvnath Planet, TC/G-8/
8 & 9/9, Vibhuti Khand, Gomti Nagar, Lucknow-
226010 (U.P.) ...Opposite parties.
Present:-
1- Hon’ble Sri Rajendra Singh, Presiding Member.
2- Hon’ble Sri Sushil Kumar, Member.
SriVishnu Kumar Mishra, Advocate for complainant.
Sri Rajesh Chaddha, Advocate for the opposite parties.
Date: 26.4.2023
JUDGMENT
Per Sri Rajendra Singh, Member- In short, the brief facts of the complaint case are that, that the complainant is co-owner of the residential flat number T-9/ 304 along with his wife, which they have purchased from the opposite parties under the ’Flat Buyer Agreement’ dated 29.09.2009 entered into between the complainant along with the wife and the opposite parties. The complainant herein is an advocate of high stature practising at the Hon’ble High Court of judicature at Allahabad, sitting at Lucknow, while his wife who is co-owner of the said flat” is a judicial officer of Class-I. Assumed to belong to the elite class society, the complainant and his wife being parents of two growing sons, were interested and motivated to have their own accommodation in the city of Lucknow suitable to their needs and status as such. Somewhere in the year 2005-06, the opposite parties started the project of construction of commercial cum Group Housing Complex at Vibhuti Khand in the Gomti Nagar area of Lucknow with the name ‘Parswanath Planet’. The opposite parties publicised the said project through advertisements in a very alluring fashion and style, in the newspapers of wide circulation in and around the city of Lucknow, on the Internet and by means of leaflets/pamphlets containing the price list of the flats and highlighting the special features of the project.
The leaflets/pamphlets and brochure distributed in the public and information displayed on the Internet on their webpage at web address ‘www.parsvnath.com’, as a part of their publicity and advertisement, the opposite parties have professed that, inter alia, Parsvanath Planet encapsulates a lifestyle with luxuries beyond comforts. It is one of the finest expressions of conceptualisation, which creates a bond less joy of owning and expense that liberates you from irritants and inconveniences. With soothing invirons of grass laden landscapes, well planted pathways and jogging tracks, it presents a magnificent expression of traditional preferences of men for living close to nature. One can experience the sheer confluence of urban taste and lifestyle with value-added features at Parsvanath Planet…..’ Being driven by the advertisements by the opposite parties, the complainant visited the office of the opposite parties at Lucknow for necessary preliminary enquiry about the upcoming project viz. “Parsvanath Planet”, who was attended by the officials of the opposite parties. The complainant was persuaded by the said officials of the opposite parties who boasted about the said project and convinced the complainant to proceed further towards booking of a flat for his accommodation in the apartment.
On being swayed by the aforementioned advertisements published by the opposite parties and being persuaded by the officials of the opposite parties as well, the complainant booked a residential flat bearing no.T-9/304 as offered by the opposite parties/official(s) and paid a sum of Rs.3,68,500.00 as ‘New Booking Amount” duly received vide the receipt no.15962 dated 10.8.2009 for a sum of Rs.01,00,000.00 and receipt No.15963 dated 10.8.2009 for a sum of Rs.02,68,500.00 by the officials of the opposite parties. Subsequently, on 29.9.2009 the complainant alongwith his wife and the opposite parties entered into the ‘flat buyer agreement’ (in the ‘standard form’ prepared and drafted by the opposite parties). As per the said agreement, the basic price of the flat having an approximate area of ‘1675 sq. feet’ was Rs.36,85,000.00 calculated at the rate of Rs.2,200.000 per sq. foot equivalent to Rs.23,680.00 per sq. meter.
The complainant opted for ‘payment plan A’ i.e.
‘down payment plan (with 6% rebate) as contained in annexure-1 of the aforesaid Flat Buyer Agreement. The schedule of the said ‘payment plant A’ prescribed as:
At the time to booking ……10%
Within 45 days of booking …79%+Car Parking+LM + FHC
At the time of offer of possession ..5%
(LM= Lease Money, FHC=Freehold charges)
In order to comply with the aforesaid schedule of payment to the opposite parties towards the price of the flat, the complainant applied to the LIC Housing Finance Limited for sanction and disbursal of the housing loan and managed to pay to the opposite parties the sum of Rs.34,18,175.00 out of the standing amount of Rs.34,61,195.00 payable by him, as per the final statement of accounts of the complainant maintained by the opposite parties.
As per clause 9(a) of the Flay Buyer Agreement, the construction of the flat was likely to be completed within a period of thirty six (36) months of commencement of construction of the particular block in which the flat was located with a grace period of six months. However, as submitted hereinbefore, the construction and development work of he said complex had been started way back in the year 2005-2006 and at the time of the booking of the flat, it was professed and promised by the opposite parties/officials that the construction shall be completed by the year 2010-11 and the possession of the flat shall be handed over to the complainant by the end of the year 2011. The opposite parties failed to get the construction work completed in time as professed and promised by them; and subsequently, instead of handing over the possession of the flat completed in all respect to the complainant, they started sending communications thereby demanding the rest of the amount due to the complainant towards final settlement of the accounts and promising for the issuance of letter of possession immediately after receipt of final clearance from the competent authority.
The completion of the construction work of the flat in the complex was getting delayed and they failed in delivery of possession of the flat in the ‘ready to move in’ condition to the complainant even beyond the professed/promised time. Just in order to avoid their responsibilities, the opposite parties devised a novel concept of ‘fit-out possession’ of residential flats, which was unknown in respect of residential properties and complexes, and they started buying time from the complainant in the name of offer ‘fit-out possession’. One important aspect/feature of that offer of ‘fit-out possession’ is that the opposite parties demanded the clearance of all the dues by the same letter, as per the final statement of account enclosed therewith. Annoyed by such unfair trade practices on the part of the opposite parties, the complainant protested to the same with the opposite parties by means of notice date 19.6.2013 whereby the complainant demanded the correction/ rectification of his accounts and demanded the possession of his allotted flat immediately after completing the necessary formalities in that regard. It is important to submit here that the said notice of the complainant fell on deaf ears of the opposite parties and went all in vain without getting any response therefrom. Vide letter no.PDL/Planet/T9-304/15771 dated 30.11.2015, the opposite parties offered possession of the flat to the complainant. The complainant responded to the said offer promptly and took possession of the flat after getting necessary formalities completed in that regard.
It is important to submit that the oppose parties have offered the delivery of possession of the flat only on 30.11.2015 after an inordinate delay of about 5 years against the time professed/proposed for the delivery by the end of the year 2011. In this situation, despite having paid almost all the dues on time towards the price/cost of the flat, the complainant has been forced to live and stay in the rented accommodation, suitable to his needs and the needs of his family, and thereby he had been forced to pay about Rs.12,00,000.00 and odd more towards the rent at the rate of Rs.25,000.00 per mensem. Thus, the complainant has been subjected to the financial duress to manage for the payment of equated monthly installments (EMIs) towards the aforementioned housing loan and simultaneously to pay the rent for accommodation availed by him during the interregnum period which caused acute mental agony and pain and pecuniary loss as well, for which compulsion to live and continue in the rented accommodation despite of having paid for the one of his own accommodation/flat.
It is further important to submit here that the aforementioned flat buyer agreement entered into between the parties, was intended for the fully furnished flat in ‘ready to move’ condition, and there was no mistake on the side of either party in this regard. This is clear and evident from the contents of annexure-II of the said flat buyer agreement. But, in the instant case, in utter breach of the terms of the said agreement, the opposite parties handed over the possession to the complainant with bare civil construction competed. Thereby, the complainant was again forced to get the furnishing works such as, installation of doors and windows, electrical wiring, floor tiling, sanitary and CP fitting, painting and AC installations etc., carried out at his own expenses. The complainant has lost about Rs.10,00,000.00 towards the furnishing work carried out in the flat for transforming it into ‘ready to move’ condition.
As per clause 3(a) of the said flat buyer agreement, the basic price (under the agreement) includes charges on account of 100% power backup, external electrification, fire fighting installations, pipes for gas supply, membership fee of the recreational club, broadband connectivity and centralized communication system. Similarly, in terms of clause 2(b) of the said flat buyer agreement the opposite parties have already charged a sum of Rs.1,00,000.000 from the complainant as mandatory, for providing covered car parking space. Meaning thereby, the complainant has already paid for the aforesaid provisions/facilities but, the opposite parties have not made any provision for ensuring the 100% power backup, or establishing recreational club or providing covered car parking space etc. as promised by them and for which they have already charged from the complainant; and it amounts to deficiency in service as defined under Section 2(g) and unfair trade practice on the part of the opposite parties as defined under section 2(r) of the Consumer Protection Act, 1986.
It is again important to submit here that it was clearly mentioned in the aforementioned leaflet/pamphlet with bullet marks that ‘NO Maintenance Security Deposit’ while the final statement of account as given by the opposite parties would reveal that under its Head (C), the opposite parties have charged from the complainant a sum to the tune of Rs.1,37,914.00 towards ‘interest free security deposit @ Rs.50.00 per sq. ft., maintenance charges for 12 months and taxes applicable thereon. Thus, it is clear as crystal from the aforesaid that the opposite parties have adopted ‘unfair trade practice’ in terms of section 2(r)(1) (ix) of the Act of 1986. In the brochure of the project viz., ‘Parsvnath Planet’, it was clearly depicted that the complex shall have lush green belt studded with the Tennis Court, Badminton Court, Basketball Court, Amphitheatre, Swimming Pool and Recreation Club etc. which was somehow in tune with one of the captions ofthe project i.e., “where lifestyle is pampered”. Needless to submit here that the complainant had agreed to buy the said flat solely relying in the assertions and representations made by/on behalf of the opposite parties only after being convinced by them. Had the opposite parties not made such representations/depictions, the complainant would certainly have not decided to buy the flat in the said complex. In this regard, it is important to submit that the complainant has made written complaint/notice dated 6.7.2016 to the opposite parties not to diminish the ambience of the complex any further and to maintain the services in the common areas as promised by them. It is specifically to submit here that so far, the opposite parties have not provided the aforementioned amenities; but in contrast to that, they have planned something else in utter derogation of the original plan and their earlier depictions/ representations made to the complainant thereby depriving the complainant and his family from availing and enjoying those facilities and thereby grossly diminishing the value of the flat and causing annoyance and mental agony to the complainant and his family.
It is also relevant to submit that the opposite parties claim and profess that they are ‘ISO 9001’ & ‘ISO 14001’ certified company and they are India’s first and only real estate company to have a NAREDCO-ICRA Dr.2-rating. But, contrary to their such a tall claim, the construction work carried out by them is absolutely sub-standard which is evident from the fact that the walls of the flat of the complainant internal as well as external have developed ‘dampness’ beyond repair. The complainant has complained and requested to the local management of the opposite parties so many times, to get the problem of the dampness fixed, but to no avail. Then the complainant with the help of the persons skilled in that area/field, has tried to get it solved/fixed, but has failed miserably. Such tall claims on the part of the opposite parties vis-à-vis the quality of work carried out by them is a further example of unfair trade practice as defined under Section 2(r)(1)(i) and ‘deficiency’ as defined under section 2(g) of the Act of 1986. The result of such sub-standard works carried out by the opposite parties has further added to the woes and anguish of the complainant and his family causing mental agony to them. Due to such gross deficiency in service and restrictive/unfair trade practice committed by the opposite parties and their persistent irresponsive and irresponsible behavior, the complainant and his family have been subjected to pecuniary loss, immense mental agony and harassment.
After being left with no other option but to take recourse to the process of law, the present complaint is being filed before this Hon’ble Commission because after receiving the amount of premium of issuance of a policy in continuance/extension of the previous policy, the same has not been issued, therefore, it is a clear case of deficiency in service on the part of the opposite parties towards the complainant and the present case is completely covered by the provisions of the Consumer Protection Act, 1986.
The complainant prays for the following reliefs:
A- That the opposite parties be directed by the Hon’ble Commission to pay to the complainant a sum of Rs.12,00,000.00 as compensation towards the rent paid by the complainant for availing the accommodation suitable to his needs and stature, for which he was compelled by the opposite parties by their non-delivery of the possession of the falt in ‘ready to move in’ condition, alongwith interest thereon @24% per annum from the date when the actual delivery of possession became due, till the date of final payment of the amount.
B- That the opposite parties be directed by the Hon’ble Commission to pay to the complainant a sum of Rs.10,00,000.00 as compensation towards the cost/expenses incurred by the complainant on account of carrying out the necessary finishing/furnishing work in the flat for transforming it to the ‘ready to move in’ condition alongwith interest thereon @24% per annum from the date of delivery of actual possession till the date of final payment of the amount.
C- That the opposite parties be directed by the Hon’ble Commission to pay to the complainant a sum of Rs.1,37,940.00 paid by the complainant to the opposite parties towards ‘interest free security deposit’ as aforesaid, alongwith interest thereon @24% per annum from the date of delivery of actual possession till the date of final payment of the amount.
D- That the opposite parties be directed by the Hon’ble Commission to pay to the complainant a sum of Rs.5,00,000.00 as compensation towards the expenses for taking necessary measures/steps for getting cured the problem of dampness developed in the walls of the flat of the complainant.
E- That the opposite parties be directed by the Hon’ble Commission to pay to the complainant a sum of Rs.20,00,000.00 as compensation towards mental agony, harassment and torture.
F- That the opposite parties be directed to pay Rs.25,000.00 towards the cost of litigation.
G- Any other further relief as this Hon’ble Commission thinks just and proper in the given facts and circumstances of the case.
The opposite party has submitted his written statement in which he has stated that the construction in the tower in which the flat of the complainant is located has been completed and the completion certificate has been duly applied for by the opposite party with the authority. Sale deed dated 28.10.2016 has already been executed in favour of the complainant. Physical possession of the flat is with the complainant since October 2016 when the NOC was issued by the opposite party upon receipt of the entire possession related dues from the complainant. The opposite party has not, at any point of time, violated or breached the provisions of the flat buyer agreement. The complaint has been filed without any cause of action. Bare allegations in the complaint are without any proof and without any alleged act on behalf of the opposite party necessary to charge it for unfair trade practice or deficiency of service.
The complainant has prayed for reliefs which otherwise have to be claimed in a suit for damages and recovery, after paying appropriate court fee. The complainant had filed the captioned complaint which otherwise is a dispute of his religion and requires elaborate evidential to be led and thus the captioned complaint cannot be adjudicated upon under the summary jurisdiction of this Hon’ble commission. This Hon’ble commission does not have pecuniary jurisdiction to try and entertain the present complaint. The complainants have prayed for rental paid along with 24% interest per annum and all other charges on account of interest, litigation cost, compensation et cetera, the same are beyond the pecuniary jurisdiction of this Hon’ble commission. It is submitted that the liability of the opposite party on account of delay is specified in clause 10 (C) of the Flat Buyer Agreement and as such the complainant cannot claim reliefs which are beyond the compensation agreed upon by him. The delay penalty in terms of this clause has already been credited in the account. The opposite party as a goodwill gesture and towards the customer satisfaction has credited an additional sum of Rs.251,250/– towards additional delay penalty which was actually not payable to the complainant.
The complainant had purchased a the said flat for investment purposes and thus cannot be covered under the definition of consumer as defined under the provisions of the Consumer Protection Act. It is pertinent to mention here that under clause 20 of the sale deed executed between the parties, the complainant has confirmed that there is no legal case pending regarding booking, allotment, construction, quality or possession of flat. The complainant has weighed Hospital from LIC HFL bank for which the tripartite agreement and permission to mortgage was issued. Hence LIC HFL has a lien on the said flat. Therefore LIC HFL was necessary party. It is denied that on being swayed by the advertisements published by the opposite party and being persuaded by the officials of the property the complainant booked the residential flat. It is submitted that according to the flat buyer agreement between the parties, date of final construction of the flat of which the possession is to be delivered to the complainant was not fixed. Clause 10 (a) of the flat buyer agreement clearly stipulates that time is not the sense of the contract and therefore even in the period of 36 months plus the grace period of six months having expired, the flat buyer agreement having a relaxation clause “likely” attracts the doctrine that “time is not the sense of the contract”. At the time of booking of the flat, the complainant was well aware about the status of construction.
It is denied that just in order to avoid their responsibilities the opposite party devised a novel concept of fit out possession of residential flat shall which was unknown in respect of residential properties and complexes, and the started buying time from the complainant in the name of office of “fit out possession”. It is submitted that the opposite party vide its letter dated 09.05.2013 offered the possession of the flat for fit out possession which was optional. The opposite party has not created any force to the complainant to take the possession of the flat for fit out purposes. The opposite party has not at any point of time violated or breached the terms of the contract. The opposite party never pressurised the complainant to opt carry out the fit out work in the flat. It is pertinent to state that the opposite party has given the special rebate in the account of the complainant towards the unfinished work. It is denied that the opposite party has not made any provision of 100% power backup. The complainant has not been able to establish any deficiency in service or unfair trade practice as contemplated under the Consumer Protection Act 1986. The construction and development work to complete the further facilities like swimming pool, tennis court, badminton court, recreational club, is going on at the project site which shall be completed soon. It is denied that the construction work carried out is absolutely substandard. It is denied that there has been any gloss deficiency in service and restrictive/unfair trade practice committed by the opposite party.
There are rows no cause of action in favour of the complainant and against the opposite party for the purpose of filing the present complaint. There are rows no cause of action and in the absence of any cause of action in favour of the complainant and against the opposite party, the question of invoking the jurisdiction of this Hon’ble Commission does not arise. The complainant have instituted a false, frivolous and vexatious complaint against the opposite party and the same is liable to be dismissed. The composition claimed has to be proportionate and rational with the loss of injury suffered by the complainant. There is no negligence or delay on the part of the opposite party so as to entitled the complainant to claim any amount from the opposite party. Therefore it is safely prayed that this complaint may kindly be dismissed with exemplary cost.
We have heard the learned counsel for the complainant SriVishnu Kumar Mishra and ld. counsel for the opposire parties Sri Rajesh Chaddha. We have perused the pleadings, documents and evidence on the record.
From the very facts and from the flat buyer agreement it is clear that the possession was to be handed over within three years plus grace period of six months meaning thereby that the possession was to be handed over on or before completion of 42 months. The flat buyer agreement is of 29.09.2009 , so according to it the possession of the flat was to be delivered on or before 29.03.2013. We may say that the possession was to be heard over before April 1, 2013. The opposite party has stated that time was not the essence of the flat buyer agreement. Then why the said flat buyer agreement was entered into? Let us suppose that in any flat buyer agreement, there is no time specified for delivery of possession to the allottee, it does not mean that the delivery of possession may be kept pending for years to come. In such cases Hon’ble Supreme Court has held that if there is no time limit to deliver the possession of land/flat to the allottee, reasonable time will be three years.
Hon’ble Supreme Court in civil appeal number (S) 3533-3534 of 2017, M/S Fortune infrastructure (NOW known as M/S Hicon Infrastructure) &Anr Vs Trevor D’Lima & Ors., Judgement 12.03.2018 has held:
“Moreover, a person cannot be made to wait indefinitely for the possession of the flats allotted to them and they are entitled to seek the refund of the amount paid by them, along with compensation. Although we are aware of the fact that when there was no delivery period stipulated in the agreement, a reasonable time has to be taken into consideration. In the facts and circumstances of this case, a time period of 3 years would have been reasonable for completion of the contract i.e., the possession was required to be given by last quarter of 2014. Further there is no dispute as to the fact that until now there is no redevelopment of the property. Hence, in view of the above discussion, which draw us to an irresistible conclusion that there is deficiency of service on the part of the appellants and accordingly the issue is answered. When once this Court comes to the conclusion that, there is deficiency of services, then the question is what compensation the respondents/complainants is entitled to ?”
Therefore the opposite party cannot deny that the time was not the essence of delivery of possession because as per order be Supreme Court in shall be three years if no time limit has been fixed but here in this case the time has already been fixed for 42 months. So in the present case possession was to be delivered on or before 29.03.2013 .So we take 01.04.2013 as cut of date in this regard many thereby the possession has not been handed over before 01.04.2013 and for calculation of compensation or any damages, this date will be the starting period for the purpose of calculation.
Now we come to discuss about the completion certificate about which the opposite party has said that it has already been obtained but during argument the counsel of opposite party could not verify as to when this completion certificate was obtained as no copy has been filed. Another certificate is also important, it is occupancy certificate. First we have to see the difference of completion and occupancy certificate.
COMPLETION / OCCUPANCY CERTIFICATE
When buying a home, it is vital to obtain documents, such as the Occupancy Certificate (OC) and Completion Certificate (CC). These are essential documents that allow you to mortgage or sell your home. Hence, homebuyers are advised to take possession of their flat or property only after these documents have been issued.
According to Vikas Bhasin, CMD, Saya Group, “Completion Certificate and Occupancy Certificate are some of the most important documents for a home buyer. Civic authorities can evict the occupants in case of non-availability of the necessary approvals. Before investing in a property, people must be doubly assured that all the certificates and approvals are in place.”
Let us dive a little deeper into the details of these documents and their importance before you make a move to buy your dream home.
Owning a home is the culmination of years of savings, research, and paperwork. After patiently waiting for the construction to be complete, you finally register the property and take possession of your flat. But what if your dream home is declared unauthorised, and you are evicted by the authorities? This is not as far-fetched as it sounds. This nightmare could turn into reality without a crucial link in the property sale process - the Occupancy Certificate (OC).
The majority of apartments in different Indian cities have been occupied by owners without any occupancy certificate. This oversight can turn into a costly mistake, jeopardising the legal status of your dream home. The importance of the occupancy certificate cannot be overstated as it seals the legal status of your property and protects your ownership rights.
Decoding legal documents
To understand the importance of an occupancy certificate and other legal documents, let’s decode the legal jargon and understand their meaning in simple terms. Here’s a ready reckoner of the most important legal documents related to your property:
Occupancy Certificate
An OC certifies that the construction of the building has complied with the approved plans. It is issued by local municipal authorities or the building proposal department once the building has been completed and is ready to be occupied. Simply put, without an OC, your building has not been awarded a ‘pass certificate’.
Completion Certificate
A Completion Certificate (CC) is issued only after the construction meets other building standards like distance from the road, the height of the building, and rainwater harvesting system. A CC alone cannot legalise occupation; the OC is a must.
Commencement Certificate
If you are buying an under construction property, make sure you check the Commencement Certificate before signing the agreement. Many builders do not wait for a Commencement Certificate. This is illegal and can create serious problems in obtaining an OC at a subsequent stage.
Why is it unsafe to buy a flat without OC?
In the absence of a valid OC, the local municipal body can initiate serious action against flat owners. In 2014, residents of a well-known building complex in Mumbai’s upscale Worli area were hit with a bolt from the blue after their complex was declared unauthorised. At the time of possession, buyers overlooked the issuance of an OC from the builder. It was only after that they were forced to evacuate their flats that the writing on the wall became clear to them.
This is just one instance, and if buyers are not careful about getting the OC, they may face the following repercussions:
• In the absence of a valid OC, your building can be demolished as it can be classified as an unauthorised structure.
• The OC is crucial while applying for a home loan or loan to purchase a resale flat. If you wish to sell or hypothecate the property after a lapse of time, you will not be able to do so without a valid OC.
• The water connection, sanitary connection or electricity supply can be disconnected in the absence of an OC.
How to obtain an OC
The OC is obtained from local municipal bodies by submitting an OC application form along with the following documents:
• Commencement Certificate
• Completion Certificate
• Built and Section plan
• NOC for fire and pollution
• Area calculation sheet of floor signed by an authorised architect
• Photographs of the completed building
• Tax assessment with tax paid receipt
• Photographs of rain harvesting and solar panels
• Copy of the sanctioned plan
After submitting the form, authorities inspect the complex and confirm if it has conformed to the approved plan before issuing an OC. Legally and ideally, a builder should submit an application with the municipal commissioner for the OC within 30 days of completion of the property.
How you can apply for an OC
As a flat owner, you can also apply for an OC by approaching the local corporation or municipality, and if all approvals are in place, an OC is issued within 30 days of application. You will have to submit the same documents as the builder to procure an OC.
Know your rights
If the builder refuses to provide an OC, you should consider exercising your legal rights. You can issue a notice against the builder asking him to apply and hand over the copy of the OC within a month. You can also approach consumer forums and file a writ petition demanding the OC.
Some canny builders simply present the receipt of the OC and dupe gullible customers. But you shouldn’t accept anything less than the actual OC as the receipt may be dated.
Landmark legislations like the Real Estate Regulatory Act (RERA) have been passed to regulate the sector, promote transparency and protect consumer rights. However, consumers must be vigilant and understand their rights and responsibilities towards owning a property. Documents like OC are essential and ensure the security of your investment.
Going forward, real estate experts believe that the OC should be made mandatory for the registration of flats and essential services. Until then, buyers must ensure builders get all the necessary approvals before handing over a property.
A Completion Certificate (CC) is an important legal document that certifies that a building is constructed according to the laid down norms and master plan of the city. This document has all the information related to the project, such as the building materials used, building height, and building plan, among other things like provision for green belt.
In a nutshell, this document certifies that the building adheres to all the prevailing rules and has not violated any norms. In fact, this document is to be shown compulsorily to the authorities to obtain electricity and water connection.
Builders are allowed to obtain a provisional Completion Certificate when there are minor works left in the project. Authorities then provide a provisional certificate valid for six months. After the expiry of the six months, the developer is bound to get a final CC.
Who issues a Completion Certificate?
Local authorities issue the Completion Certificate after a thorough inspection of the premises. If the developer violates no rules, authority issues a Completion Certificate.
Why is Completion Certificate important?
Buyers must be aware of the fact that if they are buying or moving into a property that does not have a Completion Certificate, they might be making a risky investment choice. The civic authorities hold the power to slap heavy penalties on the developer, leading to stalling or cancellation of the registered layout of the project. In case the building is already occupied, residents may also have to face eviction in extreme cases.
Difference between Occupancy Certificate and Completion Certificate
Occupancy Certificate examines and certifies a property for adherence to bye-laws, civic amenities, electricity, sanitation and other clearances. On the other hand, a Completion Certificate is a document that certifies that a property is fit for possession by the buyers.
Clarifying the difference, Deepak Kapoor, Director, Gulshan Homz, says, “Completion Certificate is just a reaffirmation that the building has been constructed as per the building byelaws and the layout plan has been approved by various concerned authorities. Occupation Certificate signals that there is no violation of building construction norms, and thus, the structure is safe for occupants.
Generally, these documents are not required at the time of registry, and hence, buyers tend to overlook or ignore these. But for their own benefit and peace of mind, it is warranted that buyers of both ready-to-move-in as well as under-construction properties check these documents before taking possession. This would help avoid any unnecessary dispute or confrontation in the future.
Hon’ble Supreme Court on occupancy certificate by the builders.
Supreme Court: The bench of Dr. DY Chandrachud* and AS Bopanna, JJ has held that failure on the part of the builder to provide occupancy certificate is a continuing breach under the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act 1963 and amounts to a continuing wrong.
Factual Background
The appellant is a co-operative housing society. The respondent constructed Wings ‘A’ and ‘B’ and entered into agreements to sell flats with individual purchasers in accordance with the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act 1963 (MOFA). The members of the appellant booked the flats in 1993 and were granted possession in 1997. According to the appellant, the respondent failed to take steps to obtain the occupation certificate from the municipal authorities.
There was an obligation on the respondent to provide the occupancy certificate and pay for the relevant charges till the certificate has been provided, however, the respondent time and again failed to provide the occupancy certificate to the appellant society. For this reason, a complaint was instituted in 1998 by the appellant against the respondent. The NCDRC on 20 August 2014 directed the respondent to obtain the certificate within a period of four months. Further, the NCDRC also imposed a penalty for any the delay in obtaining the occupancy certificate beyond these 4 months. Since 2014 till date, the respondent failed to provide the occupancy certificate.
In the absence of the occupation certificate, individual flat owners were not eligible for electricity and water connections. Due to the efforts of the appellant, temporary water and electricity connections were granted by the authorities. However, the members of the appellant had to pay property tax at a rate 25% higher than the normal rate and water charges at a rate which was 50% higher than the normal charge.
Analysis
Obligations of Promoter under MOFA
Section 3 of the MOFA imposes certain general obligations on a promoter. These obligations inter alia include making disclosures on the nature of title to the land, encumbrances on the land, fixtures, fittings and amenities to be provided, and to not grant possession of a flat until a completion certificate is given by the local authority. The responsibility to obtain the occupancy certificate from the local authority has also been imposed under the agreement to sell between the members of the appellant and the respondent on the latter.
Sections 3 and 6 of the MOFA indicate that the promoter has an obligation to provide the occupancy certificate to the flat owners. Apart from this, the promoter must make payments of outgoings such as ground rent, municipal taxes, water charges and electricity charges till the time the property is transferred to the flat-owners. Where the promoter fails to pay such charges, the promoter is liable even after the transfer of property.
Limitation
In the instant case, the appellant submitted that since the cause of action is founded on a continuing wrong, the complaint is within limitation.
Section 24A of the Consumer Protection Act 1986 provides for the period of limitation period for lodging a complaint. A complaint to a consumer forum has to be filed within two years of the date on which the cause of action has arisen.
Section 22 of the Limitation Act 1963 provides for the computation of limitation in the case of a continuing breach of contract or tort. It provides that in case of a continuing breach of contract, a fresh period of limitation begins to run at every moment of time during which the breach continues
A continuing wrong occurs when a party continuously breaches an obligation imposed by law or agreement. The continuous failure to obtain an occupancy certificate is a breach of the obligations imposed on the respondent under the MOFA and amounts to a continuing wrong.
The appellants, therefore, were entitled to damages arising out of this continuing wrong and their complaint is not barred by limitation.
“Rejecting the complaint as being barred by limitation, when the demand for higher taxes is made repeatedly due to the lack of an occupancy certificate, is a narrow view which is not consonance with the welfare objective of the Consumer Protection Act 1986.”
Consumer
Section 2(1)(d) of the Consumer Protection Act defines a ‘consumer’ as a person that avails of any service for a consideration. A ‘deficiency’ is defined under Section 2(1)(g) as the shortcoming or inadequacy in the quality of service that is required to be maintained by law.
In the present case, the NCDRC had held that the appellant is not a ‘consumer’ under the provisions of the Consumer Protection Act as they have claimed the recovery of higher charges paid to the municipal authorities from the respondent. Extending this further, the NCDRC observed that the respondent is not the service provider for water or electricity and thus, the complaint is not maintainable.
The respondent was responsible for transferring the title to the flats to the society along with the occupancy certificate. The failure of the respondent to obtain the occupation certificate is a deficiency in service for which the respondent is liable. Thus, the members of the appellant society are well within their rights as ‘consumers’ to pray for compensation as a recompense for the consequent liability (such as payment of higher taxes and water charges by the owners) arising from the lack of an occupancy certificate.
[Samruddhi Co-operative Housing Society Ltd v. Mumbai Mahalaxmi Construction Pvt. Ltd, , decided on 11.01.2022]
Now we see the main objectives of Consumer Protection Act 1986.
What are the main objectives of consumer protection act?
The Consumer Protection Act, came into existence and implemented in 1986, provides Consumer Rights to prevent consumers from fraud or specified unfair practices. It safeguards and encourages and gives an opportunity to consumers to speak against insufficiency and flaws in goods and services. If traders, manufacturers and distributors follow any foul trade, this act protects their rights as a consumer.
On which products are these right applicable?
This Protection Act covers entire goods and services of all sectors that are public, private, or cooperative sectors, except those exempted by the central government. The act provides a floor for a consumer where one can file their complaint against the product and the forum takes an action against the concerned supplier and compensation is granted to the consumer for the inconvenience he/she has encountered.
Objectives of consumer protection act
- To Provide better and all round protection to consumer.
- To Provide machinery for the speedy redressal of the grievances.
- To Create framework for consumers to seek redressal.
- To Provide rights to consumers.
- To Safeguarde rights of Consumers.
Let us know more about the rights and responsiblities of consumer
Consumer Rights
Listed below are the Rights of the Consumer
- Right to Safety- Before buying, a consumer can examine on the quality and guarantee of the goods and opt for ISI or AGMARK products.
- Right to Choose- Consumer must have the right to choose from a variety and number of goods and in a competitive price
- Right to be informed- The buyers must be provided with complete information with all the necessary and adequate details of the product, make her/him act wise, and change the buying decision.
- Right to Consumer Education- The consumer must be aware of his/her rights and avoid exploitation.
- Right to be heard- The consumer will get due attention to express their grievances at a suitable platform.
- Right to seek compensation- The consumer has the right to seek or ask for redressal against unfair and inhumane practices or exploitation of the consumer.
Consumer Responsibilities
- Responsibility to be aware – A consumer has to be careful of the safety and quality of products and services before purchasing.
- Responsibility to think independently– Consumer should be well bothered about what they want and need and hence make independent choices.
- Responsibility to speak out- The buyer should be fearless to speak out their problems and tell to traders what they exactly want
- Responsibility to complain- It becomes the consumer’s responsibility to express and file a complaint about their dissatisfaction with goods or services in a sincere and fair manner.
- Responsibility to be an Ethical Consumer- Consumer must be fair and not engage themselves with any deceptive practice.
The Consumer Protection Act 1986 was enacted to provide for better protection of the interests of consumers and for that purpose to make provision for the establishment of Consumers Councils and other authorities for the settlement of consumers’ disputes and for matters connected therewith (Preamble).
The Act Inter alia, seeks to promote and protect the rights of consumers such as —
(1) right to be protected against marketing of goods which are hazardous to life and property;
(2) right to be informed about the quality, quantity, potency, purity, standard and price of goods to protect the consumer against unfair trade practices;
(3) right to be assured, wherever possible, access to variety of goods at competitive prices;
(4) right to be heard and to assured that customers’ interests will receive due consideration at appropriate forums.
(5) Right to seek redressal against unfair practices or unscrupulous exploitation of consumers; and
(6) Right to consumer education
The objects are sought to be promoted and protected by the Consumer Protection Councils to be established at the Central and State levels.
The Act applies to all goods and services, except if otherwise provided by the Central Government by Notification. To provide speedy and simple redressal of consumer disputes, a quasi judicial machinery is set up at the District, State and Central levels. The three tier system of quasi judicial bodies will observe the principle of natural justice and are empowered to give relief of a specific nature and to award, wherever appropriate, compensation to consumers. Penalties for non-compliance of the orders given by the quasi judicial bodies have also been provided.
Thus the Consumer Protection Act is to serve the interests of the consumers. Consumer education and redressal of consumers’ grievances are the two aspects of the Act. It makes good the loss a consumer suffers and increases the feeling of responsibility of the manufacturer, trader, supplier or businessman.
The provisions of the Act have to be construed in favor of the consumer to achieve the purpose of enactment as it is social benefit oriented legislation. The primary duty of the Court while construing the provisions of such an Act is to adopt a constructive approach subject to that it should not do violence to the language of the provisions and not contrary to attempted objective of the enactment.
Extent of Consumer Protection:
While other legislations may be either punitive or preventive, the Consumer Protection Act compensates the consumer. The provisions of the Act are in addition to and not in derogation of the provisions of any law at the time being in force (Sec 3). In Maine Container Services South Pvt Ltd v Go Garments 1998 (3) SCC 247 it has been held that the Contract Act applies to all litigants before the Commissioner under the Consumers Protection Act. Passengers traveling in train suffering injuries and loss of Jewelry as a result of assault by unruly crowd are eligible for filing of complaint before State Commission is maintainable notwithstanding the provisions of sections 100 and 103 of Railways Act, 1889. The Consumer Protection Act therefore gives the consumer an additional remedy besides those which may be available under other existing laws. Existence of an arbitration clause in the agreement is no bar to the entertainment of complaint by the Redressal Agency as the remedy under the Act is in addition to the provisions of any other law. However, the Consumer Forums under the Act have not taken over the jurisdiction of civil Courts. If the dispute between the parties is pending in Civil Court no Consumer Forum will adjudicate the dispute. Similarly if evidence be laid by the parties to the dispute is voluminous or complicated the parties will be referred to the appropriate Civil Court.
Consumers Protection Act, thus enshrines the rights of a consumer to be informed about the quality, quantity, potency, price etc., of the goods to be protected against unfair trade practices, to seek inexpensive and expeditious redressal of grievances before the Consumer Forums. Consumer Protection Act is a benevolent piece of legislation to protect a large body of consumers from exploitation.
With the passage of time, the populace of the country is on hike and so are their opinions. Their opinion forms the basis for their interpretation, it may be a good or a bad interpretation. What would happen in the situation where people starting interpreting the laws? We might be flooded with several interpretations. The interpretations will be in such huge number that the laws will become unclear. This is the reason why lawmakers, while making the law, formulate itin accordance with the aim, set out by them, before penning down the legislations. The aim of any legislation defines the basis of the act. It becomes the ground norm of the act, based upon which the judiciary interprets the disputed texts.
The aim of any act forms the indispensable element, because it acts as the cord that delivers the real intention of the legislators behind the act. Whenever there is clash between two legislations, it is the aim of the legislation which makes the judges to derive at the endpoint in deciding which law has the superseding effect. It is through the doctrine of pith and substance that judges are able to derive at the major inclination towards one act over another act. This inclination is decided on the basis of the aim/goal of the act and the facts of that particular case.
Somewhat similar situation aroused in front of Supreme Court in the case of Aftab Singh and Others v. Emaar MGF Land Limited and Another ( Review Petition (C) Nos. 2629-2630 of 2018 in Civil Appeal Nos. 23512-23513 of 2017)CONSUMER PROTECTION ACT (CPA)
The beneficial legislation of Consumer Protection Act aims at reducing the grievances of the all classes of customers by providing them the preferential treatment. According to the Consumer Protection Act, the consumer dispute is the entity where the consumer/ customers have been given the convenient safeguards against ample exploitation like bad customer service, faulty goods or any unfair trade practices. The interest of the customers is protected by setting up, the three tier quasi-judicial consumer Redressal machinery which are at national, state and district levels as per section 9 of Consumer Protection Act. The Consumer Protection Act, 1986 (CPA) has been enacted in light of certain concerns related to public policy and the benefit of consumer.So it is clear that this act to is in favour of the consumers and it has overriding effect on the arbitration act because this act is not in derogation of any act but in addition of another act.
Now we come to the facts of the appellant case. The opposite party has said that the possession of the flat has been delivered on 30 November 2015 but it is not clear that this position was delivered with our without completion and occupancy certificate. Without a certificate the delivery of possession is no delivery in the eye of law. Except this law also requires NOCs from various department mainly from Fire Department, Civil Action Department, Pollution Control Department etc. no such copy of an NOC has been filed by the opposite party. This amount is deficiency in service and also unfair trade practice because many allottees don’t know about the certificates. But it is the duty of the builders to provide all the certificates and NOCs to the allottees. Whatever amount has been paid by the builder to the complainant is not a mercy but they had paid a meagre amount as compared to the rate of interest or penalty which they impose on the allottees in case of delay of payment. We have to see all these aspects and also we have to see the various judgements of the Hon’ble Supreme Court and NCDRC regarding compensation, damages, payment of rental etc.
Hon’ble Supreme Court has held in Ghaziabad Development Authority Vs. Balbir Singh (2004) 4 SCC 65-“The Supreme Court, at the outset, reiterated the position taken in the case of Lucknow Development Authority v. M.K. Gupta, and held that “the Consumer Protection Act has a wide reach and the Commission has jurisdiction even in cases of service rendered by statutory and public authorities”. It further held that the power of the NCDRC extends to awarding compensation to consumers for misfeasance in the public office i.e. an act which is oppressive or capricious or arbitrary or negligent provided loss or injury is suffered by a citizen. Therefore, it upheld the appeals filed before it to the extent that it confirmed the jurisdiction of the NCDRC to award compensation in cases of service rendered by statutory & public authorities (the land development authorities in the present case).
As to the issue of whether the grant of interest at the rate of 18% per annum by the NCDRC in all cases is justifiable, the Supreme Court held in the negative. It stated that “the power to and duty to award compensation does not mean that irrespective of facts of the case compensation can be awarded in all matters at a uniform rate of 18% per annum.” It held it to be unsustainable. The Court further stated that the “Award of compensation must be under different separate heads and must vary from case to case depending on the facts of each case.” The purpose of awarding compensation is to recompense for a loss or injury suffered and such compensation would therefore be proportional to the amount of loss and injury.
While considering the compensation to be awarded to the consumers in cases of deficiency of service by Development Authorities, the Court laid down a range of principles for the determination of the amount of compensation, summarised below:
- To award compensation, the Forum or the Commission must determine that service has been deficient and/or misfeasance in public office which has resulted in loss or injury. While no hard and fast rule can be laid down, the Court gave a few instances where the award of compensation would be justifiable, including where possession is not handed over within the intimated period even though allotment is made and the price is paid. In such cases, the loss could be determined based on loss of rent which could have been earned if possession was given. Compensation could also be the scheme has been canceled without any justifiable cause, after the allotment.
- Compensation cannot be uniform and to illustrate this, the Court lays down the principle to be followed for the determination of compensation in two cases- (a) where the delivery of possession is being directed, and (b) where only the monies are directed to be returned or refunded by the Court. In case (a), the compensation for harassment will necessarily have to be less since in a way the aggrieved party is being compensated by an increase in the value of the property he is getting. In case (b) however, the party is suffering a greater loss since he has been deprived of the flat/plot, and his expectation of delivery of possession. He would also be denied the benefit of an increase in the value of land and the compensation thereof. Therefore, the compensation to be awarded in such cases would have to be higher than in case (a).
The Court held that “such compensation has to be worked out after looking into the facts of each case and after determining what is the amount of harassment/loss which has been caused to the consumer.”
- Compensation would include compensation for physical, mental, or even emotional suffering, insult, or injury or loss.”
“The consumer protection laws have a wide reach and the consumers are entitled to receive compensation for deficiency in services rendered by statutory and public authorities. The Consumer Commissions have been vested with the jurisdiction to award the value of goods or services and compensation. On being satisfied that a complainant is entitled to compensation for loss or injury or harassment or mental agony or oppression, it must direct the authority to pay compensation. A wide discretion has been given to determine the quantum of compensation for any loss or damage suffered by a consumer, to redress any injustice. However, it is a well-established principle that the computation of compensation has to be fair, reasonable, and must reconcile with the loss or injury suffered. The Consumer Forum is cast with the duty to take into account all relevant factors for arriving at the compensation to be paid.
This landmark decision has set a precedent on the matter of compensation to be awarded in matters relating to allotment of land by development authorities and has been relied upon in many subsequent cases of the Supreme Court. In the case of H. P. Housing Board v. Varinder Kumar Garg] and Haryana Urban Development Authority vs. Darsh Kumar, the Supreme Court directed the Commission to follow the principles laid down in the case of Ghaziabad Development Authority vs. Balbir Singh in future cases.”
Hon’ble Supreme Court in the case of Haryana Urban Development ..... vs. Darsh Kumar, Etc., Civil Appeal no 5796 of 2002 decided on 28 July, 2004 has held ;
“This Court has, in the case of Ghaziabad Development Authority vs. Balbir Singh reported in (2004) 5 SCC 65, deprecated this practice. This Court has held that interest at the rate of 18% cannot be granted in all cases irrespective of the facts of the case. This Court has held that the Consumer Forums could grant damages/compensation for mental agony/ harassment where it finds misfeasance in public office. This Court has held that such compensation is a recompense for the loss or injury and it necessarily has to be based on a finding of loss or injury and must co-relate with the amount of loss or injury. This Court has held that the Forum or the Commission thus had to determine that there was deficiency in service and/or misfeasance in public office and that it has resulted in loss or injury. This Court has also laid down certain other guidelines which the Forum or the Commission has to follow in future cases.
We are informed that in spite of there being no stay, to payment of interest beyond 12% and in spite of clarification given by this Court's order (reported in (2004) 5 SCC 65), the amounts have still not been paid. We feel that for the lapse Appellants must pay interest at the rate of 15% from 17th March, 2004 till payment. Appellants shall also pay costs fixed at Rs.500/- in each case to the Legal Aid Society of the Supreme Court. TheAppellants must recover the amount paid towards costs personally from the officer/s, who were responsible for not paying even after clarification by this Court. We clarify that this Order shall not be taken as a precedent in any other matter as the order has been passed taking special features of the case into account. The Forum/Commission will follow the principles laid down by this Court in the case of Ghaziabad Development Authority vs. Balbir Singh (supra) in future cases. The Appeals are disposed off in above terms. There will be no order as to costs.”
So it is clear that the compensation and rate of interest shall depend on the facts and circumstances of each case and no hard and fast rule can be framed. In this connection some of the judgment of the Supreme Court and Hon’ble NCDRC should be taken into account.
In the case of PRIYANKA MITTAL & ANR. V. PARSVNATH DEVELOPERS LTD. & ANR. (NCDRC).These appeals arise out of single order of State Commission, hence, decided by common order. These appeals have been filed against the order dated 25.2.2015 in Complaint Nos. 18 of 2013- Nalin Bhargava &Anr. Vs. Parsvnath Developers Ltd. &Anr.; 34 of 2013- Jasleen Viswanathan &Anr. Vs. Parsvnath Developers Ltd. &Anr.; 58 of 2011- Janmejai Mani Tiwari Vs. Parsvnath Developers Ltd. &Anr.; 68 of 2013- Indu Singh Vs. Parsvnath Developers Ltd. &Anr.; 69 of 2013- Poonam Sagar Vs. Parsvnath Developers Ltd. &Anr.; 86 of 2010- Priyanka Mittal &Anr. Vs. Parsvnath Developers Ltd. &Anr.; 101 of 2011- Mohd. Aslam Khan &Anr. Vs. Parsvnath DevelopersLtd. &Anr.; 130 of 2012- Dr. Sunil Kr. Singh &Anr. Vs. Parsvnath Developers Ltd. &Anr.; 49 of 2012- Neera Mittal &Anr. Vs. Parsvnath Developers Ltd. &Anr.; 74 of 2011- Deepak Bhalla Vs. Parsvnath Developers Ltd. &Anr.; 87 of 2010- Syed Gufran Ali Alvi&Anr. Vs. Parsvnath Developers Ltd. &Anr.; 96 of 2011- Uppasana Malik Vs. Parsvnath Developers Ltd. &Anr.; 175 of 20130- Umesh Chandra Dixit &Anr. Vs. Parsvnath Developers Ltd. &Anr.; 97 of 2011- Pravin Kumar Goel &Anr. Vs. Parsvnath Developers Ltd. &Anr. which complaints were partly allowed.
The Hon’ble NCDRC held that:
“Brief facts of the cases are that opposite parties/respondents 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 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/appellants 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 specifications 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 alongwith 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 therecovery of their dues. Alleging deficiency on the part of opposite parties/ respondents, complainants filed separate complaints before State Commission. Aggrieved by the order of Hon’ble State Commission, these appeals preferred before Hon’ble National Consumer Disputes Redressal Commission.
Hon’ble NCDRC discussed various case laws and after hearing the parties held,
“Learned Counsel for appellants submitted that as complainants have been deprived of possession for a long period beyond agreed period, it amounts to restrictive trade practice under and complainants are entitled to get compensation. Section 2 (nnn) runs as under:- means a trade practice which tends to bring about restrictive trade practice manipulation of price or its conditions of delivery or to affect flow of supplies in the market relating to goods or services in such a manner as to impose on the consumers unjustified costs or restrictions and shall include- Delay beyond the period agreed to by a trader in supply of such goods or in providing the services which has led or is likely to lead to rise in the price; Any trade practice which requires a consumer to buy, hire or avail of any goods, or, as the case may be, services as condition precedent to buying, hiring or availing of other goods or services; Perusal of aforesaid provision reveals that when opposite party delays in delivery of goods which leads to rise in the price of goods meaning thereby, more price is charged from complainant, it amounts to restrictive trade practice. In the case in hand, opposite party on account of delayed delivery of possession is not charging higher rate than the agreed rate for delivery of possession of flat, so, it does not fall within the purview of restrictive trade practice under ”
“Admittedly, agreements were executed in 2006 and as per agreements, possession of flats was to be delivered within 42 months, meaning thereby, possession was to be given in the year 2009-2010 and possession has not been handed over so far though year 2016 has started. No doubt, complainants are entitled to get penalty amount for delayed delivery of possession as per clause 10(c) of the agreement but opposite party cannot be permitted to avail benefit of aforesaid clause for indefinite period. This penalty clause should be allowed for the benefit of parties for a limited period and in the cases in hand, I deem it appropriate to extend applicability of aforesaid clause for a period of one year beyond 42 months and after that, complainants are certainly entitled to compensation. Opposite party cannot be allowed to avail huge funds of complainants by paying merely Rs. 5/- per sq. ft. for example, complainants who have purchased flat measuring 164.901 sq. mtr., they have made payment of about Rs. 31.00 to 32 lakhs and in the garb of clause 10 (c), opposite party is paying penalty @ approximately Rs. 9,000/- per month against enjoying funds more than Rs. 30.00 lakhs. As complainants have been deprived to shift to their flats for a long period which would not only have given them satisfaction of living in their own house but also have raised their social status and opposite party has enjoyed funds of complainants for a long period, I deem it appropriate to allow compensation @ Rs. 15,000/- p.m. to the complainants who have applied for flats upto 175 sq. mtr and Rs. 20,000/- per month to complainants who have applied for flats above 175 sq. after 54 months of execution of agreement till delivery of possession.”
Against this judgment, parties went to Hon’ble Supreme Court. The judgment of Hon’ble Supreme Court is:-
In Nalin Bhargava vs. Parsvnath Developers Ltd. CA 6662/2018 @ SLP(C) 7596/2016 etc and other related civil appeals on 13 July, 2018, Hon’ble Supreme Court held:-
“Leave granted in all the special leave petitions.CA 6662/2018 @ SLP(C) 7596/2016 etc.
It is submitted by Mr. M.L. Lahoty, learned counsel appearing for the appellants in all the appeals that the possession has been handed over and the deficiencies have been removed and, therefore, he has no grievance. However, Mr. Lahoty would insist that there should be imposition of costs as compensation.
Mr. Sachin Datta, learned senior counsel appearing for the developer has raised objections with regard to imposition of costs.
Having heard learned counsel for the parties, we are of the considered opinion that the cause of justice would be best subserved if each of the appellants in the present appeals are given Rs.1,50,000/- (Rupees one lakh fifty thousand only) per flat, towards costs. When we say “cost”, we mean costs alone and nothing else.”
In the case of Meerut Development Authority Vs. Suresh Chandra Garg, Special Leave to Appeal (C) No(s). 24059/2022, Judgment dated 05.01.2023 Hon’ble Supreme Court has held, “consequently, the present petition is disposed of with a direction, to sum up of the litigation which is pending for a long time. Let the order of the District Consumer Commission 06.09.2019 shall be complied with and the respondent be refunded the entire deposited amount with simple interest at the rate of 12% per annum within a further period of 60 days from today failing which it shall carry interest at the rate of 15% per annum until actual payment.”
Therefore it is clear that the amount shall be refunded with simple interest at the rate of 12% within 60 days from the date of judgment otherwise the rate of interest shall be 15% simple interest per annum till the date of actual payment. In this case we take the cut-off date as October 2014 , and the interest shall be computed from November 1, 2014 till the date of actual payment.
These builders are just earning money from the consumers to whom they issued allotment letters and got a huge amount. They keep this amount for a long time and earn interest on it. Property dealing is that part of business where they never pay a penny to the consumers on their amounts deposited for a long-term or if they pay, they pay a meagre interest of about 5% or so but they charge 18 to 24% or more if the consumers default in depositing any instalment. It reminds us the story of “The Merchant of Venice” The Merchant of Venice is the story of a Jewish money lender Shylock who demands that an antisemitic Christian offer “a pound of flesh” as collateral against a loan. These acts of builders also remind us the age of Sahukari during ancient India and also during British Raj. Whether these builders have power to frame their own law? They put their terms and conditions in such a way that the sufferer will always be the consumer. The Consumer Protection Act 1986 has been enacted for the benefits of consumers, so the courts dealing with Consumer Protection Act 1986 should come forward for their rescue. The courts are not governed by the builders but they are governed by the law, Custom and Usages. Now in the background of all the facts and also the facts of the present case, we will also discuss something more. We should also see the objects of the Consumer Protection Act 1986.
Fit out possession is a penalty adopted by the builders for their sake. When they are liable to deliver the possession of a fully finished our furnished flat according to the flat buyer agreement, they are blind by the promise and they cannot take the shelter of fit out possession. In this case the whole price has already been deposited by the complainants which has been admitted by the opposite party. As far as completion and occupancy certificate are concerned, their is no proof that it has already been obtained by the opposite party. So the complainants are entitled for the relief according to the judgement of Hon’ble Supreme Court and Hon’ble NCDRC. After going through all the facts and circumstances of the plaint case we have already come to fix a date for calculation of compensation, damages, rents et cetera and it is 01.04.2013. We are of the opinion that the complainants are entitled for the following reliefs.
The complainants are entitled for rent at a rate of Rs.15,000/– per month in the light of Hon’ble NCDRC judgement ,from 01.04.2013 with interest at a rate of 12%, from the opposite parties, jointly and severally, if paid within 60 days from the date of judgment of this complaint case and if not paid within 60 days, the rate of interest shall be 15% per annum from 01.04.2013 till the delivery of actual possession of the flat accompanying with completion certificate/occupancy certificate, NOCs of fire department, civil action department, pollution control Department etc.
The complainants are entitled for Rs.8,00,000/– towards the expenditure of finishing work with interest at a rate of 12% from 01.04.2013, from the opposite parties, jointly and severally, if paid within 60 days from the date of judgement of this complaint case and if not paid within 60 days, the rate of interest shall be 15% per annum from 01.04.2013 till the delivery of actual possession of the flat accompanying with completion certificate/occupancy certificate, NOCs of fire department, civil action department, pollution control Department etc.
The complainants are entitled to get Rs.1,37,940/– paid towards security deposit with interest at a rate of 12% from 01.04.2023, from the opposite parties, jointly and severally,if paid within 60 days from the date of judgment of this complaint case and if not paid within 60 days, the rate of interest shall be 15% per annum from 01.04.2013 till the delivery of actual possession of the flat accompanying with completion certificate/occupancy certificate, NOCs of fire department, civil action department, pollution control Department etc.
The complainants are entitled to receive Rs.25,000.00 towards cost of litigation from 01.04.2013 with interest at a rate of 12% from the opposite parties, jointly and severally, if paid within 60 days from the date of judgement of this complaint case and if not paid within 60 days, the rate of interest shall be 15% per annum from 01.04.2013 till the delivery of actual possession of the flat accompanying with completion certificate/occupancy certificate, NOCs of fire department, civil action department, pollution control Department etc.
Towards mental agony, depression, torture, the complainant is entitled to get Rs.20 lakhs from the opposite party, jointly and severally, with interest at a rate of 12%from 01.04.2013 if paid within 60 days from the date of judgment of this complaint case and if not paid within 60 days, the rate of interest shall be 15% per annum from 01.04.2013 till the delivery of actual possession of the flat accompanying with completion certificate/occupancy certificate, NOCs of fire department, civil action department, pollution control Department etc.
The complaint case is decided accordingly.
ORDER
1- The opposite parties, jointly and severally, are directed to pay the complainant ₹ 15,000/– per month in the light of Hon’ble NCDRC judgment ,from 01.04.2013 with interest at a rate of 12%, if paid within 60 days from the date of judgment of this complaint case and if not paid within 60 days, the rate of interest shall be 15% per annum from 01.04.2013 till the delivery of actual possession of the flat accompanying with completion certificate/occupancy certificate, NOCs of fire department, civil action department, pollution control Department etc.
2- The opposite parties, jointly and severally, are directed to pay the complainant Rs.8,00,000/– towards the expenditure of finishing work with interest at a rate of 12% from 01.04.2013 if paid within 60 days from the date of judgment of this complaint case and if not paid within 60 days, the rate of interest shall be 15% per annum from 01.04.2013 till the delivery of actual possession of the flat accompanying with completion certificate/occupancy certificate ,NOCs of fire department, civil action department, pollution control Department etc.
3- The opposite parties, jointly and severally, are directed to pay the complainant Rs.1,37,940/– paid towards security deposit with interest at a rate of 12% from 01.04.2013 if paid within 60 days from the date of judgment of this complaint case and if not paid within 60 days, the rate of interest shall be 15% per annum from 01.04.2013 till the delivery of actual possession of the flat accompanying with completion certificate/occupancy certificate, NOCs of fire department, civil action department, pollution control Department etc.
4- The opposite parties, jointly and severally, are directed to pay the complainant Rs.25,000.00 towards cost of litigation with interest at a rate of 12% from 01.04.2013 if paid within 60 days from the date of judgment of this complaint case and if not paid within 60 days, the rate of interest shall be 15% per annum from 01.04.2013 till the delivery of actual possession of the flat accompanying with completion certificate/occupancy certificate, NOCs of fire department, civil action department, pollution control Department etc.
5- The opposite parties, jointly and severally, are directed to pay the complainant Rs.20 lakhs towards mental torture, harassment, depression, with interest at a rate of 12% from 01.04.2013 if paid within 60 days from the date of judgment of this complaint case and if not paid within 60 days, the rate of interest shall be 15% per annum from 01.04.2013 till the delivery of actual possession of the flat accompanying with completion certificate/occupancy certificate, NOCs of fire department, civil action department, pollution control Department etc.
All the decreetal amount shall be paid within 60 days from the date of judgment of this complaint case, the complainant shall be entitled to present Execution proceedings before this court at the cost of the opposite parties.
The stenographer is requested to upload this order on the Website of this Commission today itself.
Certified copy of this judgment be provided to the parties as per rules.
(Sushil Kumar) (Rajendra Singh)
Member Presiding Member
Judgment dated/typed signed by us and pronounced in the open court.
Consign to the Record-room.
(Sushil Kumar) (Rajendra Singh)
Member Presiding Member
Dated 26.04.2013
JafRi, PA I
C-2