Chandigarh

StateCommission

CC/303/2017

Gurjeet Singh - Complainant(s)

Versus

Puma Realtors Private Limited - Opp.Party(s)

Gaurav Bhardwaj, Adv.

24 Aug 2017

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	303 of 2017
Date of Institution	:	07.04.2017
Date of Decision	:	24.08.2017

 

1. Gurjeet Singh S/o Sh. Daljit Singh R/o H.No.278, Phase-3-A, Mohali.
2. Arashdeep Kaur D/o Sh. Santokh Singh R/o H.No.278, Phase-3-A, Mohali.

……Complainants

V e r s u s

1. Puma Realtors Private Limited, a Company incorporated under the Companies Act, 1956 (An IREO Group Company), Registered Office at SCO No.6-8, First and Second Floors, Sector 9-D, Madhya Marg, Chandigarh 160009 (India), through its Authorised Signatory/Director.
2. Puma Realtors Private Limited, a Company incorporated under the Companies Act, 1956 (An IREO Group Company), Registered Office at No.5, Dhanraj Chambers, 1st Floor, Satbari, New Delhi-110074, through its Authorised Signatory/Director.

….. Opposite Parties.

Complaint under Section 17 of the Consumer Protection Act, 1986.

 

 

BEFORE:   JUSTICE JASBIR SINGH (RETD.), PRESIDENT.

               MR. DEV RAJ, MEMBER.

               MRS. PADMA PANDEY, MEMBER

 

Argued by: Sh.Gaurav Bhardwaj, Advocate for the complainants.

                  Sh. Ramnik Gupta, Advocate for the Opposite Parties.

 

PER DEV RAJ, MEMBER

             The facts, in brief, are that the complainants, who were looking for a flat for themselves and their family members, requested the sales staff of the Opposite Parties to provide  flat and as such, applied for one unit No.CCB-02-002 (Apartment No.2), at 2^nd Floor, in Cassia Court B, in Sector 99, SAS Nagar, Mohali, measuring 1511 sq. ft.  with 1 no. parking space at a basic sale price of Rs.49,54,980/- @Rs.3,279.27 per sq. ft. besides EDC @Rs.100/- per sq. ft. of super area. Apartment Buyer’s Agreement dated 03.11.2011 was executed between the parties (Annexure C-2). It was further stated the complainants, in all, paid Rs.49,60,592/- to the Opposite Parties as per details given in Para 5 of the complaint. It was stated that the complainants availed loan facility from HDFC Ltd. and later on the same was taken over by State Bank of India. As per Clause 13.3 of the Agreement, possession of the unit, in question, was to be handed over within 30 months from the date of the said Agreement, which stood expired on 03.05.2014. It was further stated that there was a willful, intentional delay of more than 35 months and till date, possession has not been offered by the Opposite Parties. It was further stated as per Clause No.20 of the said Agreement, time was essence in making payment of installments and as per Clause 13.4, the Company was liable to pay delay compensation @Rs.7.50 per sq. ft. per month in the event of delay in handing over possession, which came to be Rs.12,067.50 per month. It was further stated that the Opposite Parties were trying to justify the delay in offering possession under the garb of Clause 13.4, which is most inadequate and meaningless considering the fact that the complainants have paid Rs.49,60,592/- upon which, monthly interest @12% and 15% per annum comes to Rs.49,605.92 and Rs.62,007/- per month and, therefore, Clause 13.4 does not safeguard the interest of the complainants. It was further stated that after having made more than 100% of payment, the Opposite Parties failed to offer/deliver possession of the apartment, in question till date. It was further stated that Larsen & Tubro Company had been withdrawn and some new construction company namely M/s Akalia Constructions was engaged. It was further stated that after engaging the new construction company, the development/construction work at the site has come to a standstill. It was further stated that the amenities/facilities, as promised in the Agreement, like multipurpose hall, swimming pool, gym, badminton and basket ball courts, kids play area and jogging track etc. have not even been started to be developed in the project.

2.          The grievances expressed by the complainants in Para 16 of their complaint, related to unilateral change of contract from L&T to M/s Akalia Construction; delay in offering possession; not constructing drop road till the tower, in question; proposing to offer possession without completing the amenities; unilateral construction of approximately 70 flats by making flats over the existing towers.

3.          It was stated that modular kitchen was promised but only cupboards in the lower portion of the modular kitchen have been provided and not in the upper portion. It was further stated that Split AC fittings were to be provided in all the rooms including bedroom but the Opposite Parties backed out from their commitment and are providing Split AC fitting only in the living room. It was further stated that the acts of the Opposite Parties amounted to deficiency, in rendering service and indulgence into unfair trade practice.

4.          Alleging deficiency, in rendering service, and indulgence into unfair trade practice, on the part of the Opposite Parties, the complainants filed the instant complaint under Section 17 of the Consumer Protection Act 1986 (in short 1986 Act) seeking directions to the Opposite Parties to hand over possession of the apartment, in question with all amenities as promised in the Agreement; pay interest @15% on the deposited amount; pay compensation for delayed possession as per Clause 13.4 of the Agreement; pay Rs.10,00,000/- as compensation on account of harassment, mental agony etc.; provide electricity, water and sewerage from the Govt.; provide complete modular kitchen with lower and upper cupboards and also provide Split ACs provision in all the rooms besides Rs.55,000/- as litigation charges.

5.          The Opposite Parties, in their written statement, took-up certain preliminary objections, to the effect, that the complaint was liable to be dismissed, due to existence of arbitration Clause No.34 in the Apartment Buyer’s Agreement dated 03.11.2011; that since the present complaint related to enforcement of an agreement to sell/purchase of a residential apartment i.e. an immovable property and hence, was not covered under the Act; that the complainants did not hire any services of the Opposite Parties, as the parties did not enter into any contract for hiring the services; that this Commission has no territorial jurisdiction on account of existence of Clause 36 in the Agreement and that the relief claimed is beyond Section 14(1)(d) of the  1986 Act. 

6.          On merits, it was stated that the total sale consideration price agreed to be paid by the complainants was Rs.52,79,001/-. It was further stated that the Opposite Parties agreed to pay interest for two years, under subvention Scheme i.e. from the date of 1^st disbursement by HDFC and accordingly, when demand note dated 27.01.2012 was issued for Rs.14,65,335.20, the said Bank deducted Rs.2,89,592/- towards interest for two years w.e.f. 23.02.2012 to 01.02.2014 and released Rs.11,75,743/-. It was further stated that though the aforesaid amount of Rs.2,89,592/- was never paid by the complainants yet credit thereof was given to the complainants. It was further stated that the Opposite Parties have applied for occupation certificate vide application dated 11.08.2016, which is likely to be issued by the competent authority very soon. It was further stated that in terms of Clause 13.4 of the Agreement, the complainants duly agreed to receive liquidated damages from the end of the grace period i.e. 30 months plus 6 months, till possession is actually offered.  It was further stated that the complainants vide Clause No.13.3 of the Agreement agreed that the starting period for 30 months shall be date of the said Agreement or approval of the building plans and/or fulfillment of precondition imposed thereunder, which ever was later. It was further stated that building plans were approved on 18.01.2012 (Annexure OP-17) and that being so, the starting period for 30 months would not be the date of the said Agreement but would be 18.01.2012. It was further stated that as agreed between the parties, in case of failure of the Opposite Parties to deliver possession within aforesaid period of 36 months, the complainants were entitled to the liquidated damages @Rs.7.50 per sq. ft. per month till possession of the apartment is actually offered. It was further stated that the delay compensation @Rs.7.50 per sq. ft. of the super area was to be adjusted and reduced from the last and final installment, which would be demanded at the time of offer of possession.

7.          It was further stated that it was nowhere agreed that construction would be done by L&T or any other else company. It was further stated that L&T company had carried out majority of the development work but having found delay on the part of the said construction company, M/s Akalia Constructions (a sub-contractor of L&T) was appointed for finishing works of the Juniper Block & Firangipani Block only and not the Cassia Court Block where the complainants were allotted apartment. It was further stated that the entire construction work of the apartment, in question, has been done by L&T only. It was further stated that the Opposite Parties never proposed to offer possession of the apartment without completing the amenities. It was further stated that the Opposite Parties are in the process of obtaining approvals for additional areas, as agreed under Clauses 9.10 and 21.3 (in fact 10.10 and 22.3) of the Agreement.

8.          It was further stated that the Opposite Parties vide application dated 26.11.2013 applied for approval of electrical layout plan and grant of NOC to the PSPCL after submitting requisite details and PSPCL duly granted NOC dated 08.07.2015. It was further stated that the Chief Electrical Inspector to Govt. of Punjab approved the electrical installations laid in the project for commission of the same vide its NOC dated 07.08.2015. It was further stated that the Opposite Parties duly applied online vide RID No.15250 dated 27.08.2015 for the release of electric connection for the IREO Rise Project and PSPCL duly granted feasibility clearance dated 20.11.2015 for release of load/connection on the project. It was further stated that the Opposite Parties have already deposited Bank Guarantee dated 22.3.2015 for R.3,24,10,301/- plus Rs.2.97 Lacs towards Advance Consumption Deposit on 12.4.2016 in compliance to demand notice dated 28.12.2015. It was further stated that all formalities have been duly complied with and no dues remain to be paid or deposited on the part of the Opposite Parties towards energization of the electrical connection by PSPCL.

9.          It was further stated that the Opposite Parties have already constructed underground water tanks duly connected with the approved bore well, which have further been connected to the overhead tanks of each tower with pumping system to supply the water for domestic use. It was further stated that the Opposite Parties have already constructed and installed underground STP for the disposal of the sewage. It was further stated that it was nowhere agreed that modular kitchen comprising of both upper and lower portion would be provided. It was further stated that there was no agreement to provide Split AC fittings in all the rooms, rather on the contrary, said Agreement provides for provision for Split AC. It was further stated that the Opposite Parties have made provision for ACs in all the rooms. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor they indulged into any unfair trade practice. The remaining averments, were denied, being wrong.

10.        The complainants, in support of their case, submitted their separate affidavits, by way of evidence, alongwith which, a number of documents were attached.

11.        The Opposite Parties, in support of their case, submitted the affidavit of Sh. Rajiv Bhatia, their Authorised Representative, by way of evidence, alongwith which, a number of documents were attached. 

12.        We have heard the Counsel for the parties, and have gone through the evidence, and record of the case, carefully. 

13.        It is evident, on record, that the complainants were allotted Apartment No.002, Category General on Second Floor, Cassia Court B, 3B2TS Type in Group Housing Colony known as “Ireo Rise”, situated in Sector 99, SAS Nagar, Mohali, having tentative super area of 1511 sq. ft. (140.37 sq. mtrs.) together with one parking space, forming indivisible part thereof and Apartment Buyer’s Agreement was executed between the complainants and the Opposite Parties on 03.11.2011 (Annexure C-2). The basic sale price of the unit was Rs.49,54,980/- besides External Development Charges (EDC) Rs.1,51,100/- and IFMS charges Rs.45,330/-. Thus, the total sale consideration of the unit, in question, was Rs.51,51,410/-. However, as per Annexure-IV, Payment Plan (at Page 69 of the file), the total cost including service tax is shown as Rs.52,79,001.00. The payment against the aforesaid unit was to be regulated as per aforesaid Payment Plan, Annexure IV. The complainants made payment in the sum of Rs.49,60,592.00 as is apparent from latest accounts statement (Annexure OP-11). In terms of Clause 13.3 of the Agreement since building plans were approved on 18.01.2012, 30 months period for handing over possession, expired on 17.07.2014. Admittedly, possession has not been offered/delivered to the complainants by the Opposite Parties. As regards deficiency in promised amenities viz. multipurpose hall, swimming pool, gym, badminton and basket ball courts, kids play area and jogging track etc., the Opposite Parties have categorically stated in their written statement that these facilities/amenities shall be completed before handing over of possession. Action of the Opposite Parties in raising construction/floors on the tower, where the apartment allotted to the complainants is situated, is as agreed under Clause 10.10 and 22.3 of the Apatment Buyer’s Agreement.

14.        The complainants have not stated as to how change of contract from L&T to M/s Akalia Constructions caused prejudice to them. The Opposite Parties have specifically stated that L&T had completed majority of development work and it was to avoid delay that Akalia Constructions (a Sub-contractor of L&T) was appointed for finishing works of Juniper Block & Firangipani Block and not the Cassia Court Block where complainants were allotted apartment. The objection of the complainants is, therefore, devoid of merit. Further during arguments, Counsel for the complainants did not press the issues relating to change of contract from L & T to M/s Akalia Constructions and provision for the electricity, water and sewerage.

15.           The first question, that falls for consideration, is, as to whether, in the face of existence of arbitration clause No.34 in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint. It may be stated here that this Commission in case titled ‘Sarbjit Singh Vs. Puma Realtors Private Limited’, IV (2016) CPJ 126, noted that litigation in the Consumer Fora is cost effective. The complaint in the State Commission can be filed by making payment between Rs.2,000/- to Rs.4,000/- only. Whereas, as per principal Act (1996 Act), the consumer will be forced to incur huge expenses towards his/her share of arbitrator’s fee. As per mandate of 1986 Act, a complaint is proposed to be decided within three months from the date of service of the other party. On the other hand, it is admissible to an Arbitrator to decide a dispute within one year. Thereafter, the Court wherever it is challenged may also take upto one year and then there is likelihood that the matter will go to the High Court or the Hon'ble Supreme Court of India. Such an effort will be a time consuming and costly one. Taking note of fee component and time consumed in arbitration, it was observed that if the matter is referred to an Arbitrator, it would defeat the very purpose of the provisions of 1986 Act. Paras 26, 33 and 34 of the said order, inter-alia, being relevant, are extracted hereunder:-

“26.      To decide above said question, it is necessary to reproduce the provisions of  Section 3 of the Consumer Protection Act 1986 (in short the Act), which reads as under;

“3. Act not in derogation of any other law.—

The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.”

33.        The 1986 Act provides for better protection of interests and rights of the consumers. For the said purpose, the Consumer Foras were created under the Act. In Section 3 of 1986 Act, it is clearly provided that the said provision is in addition to and not in derogation of any provisions of any other law, for the time being in force. The 1986 Act is special legislation qua the consumers. The poor consumers are not expected to fight the might of multinational companies/traders, as those entities have lot of resources at their command. As stated above, in the present case, the complainant has spent his entire  life earnings to purchase the plot, in the said project, launched by the opposite party. However, his hopes were shattered, when despite making substantial payment of the sale consideration, he failed to get possession of the  plot, in question, in a developed project. As per ratio of the judgments in the case of Secretary, Thirumurugan Cooperative Agricultural Credit Society v. M. Lalitha (2004) 1 SCC 305 and United India Insurance Co. Ltd. Vs. M/s Pushpalaya Printers, I (2004) CPJ 22 (SC),  and LIC of India and another Vs. Hira Lal, IV (2011) CPJ 4 (SC), the consumers are always in a weak position, and in cases where two interpretations are possible, the one beneficial to the consumer needs to be accepted. The opinion expressed above, qua applicability of Section 8 (amended) of 1996 Act, has been given keeping in mind the above said principle.

34.        Not only this, recently, it was also so said by the National Commission, in a case titled as Lt. Col. Anil Raj & anr. Vs. M/s. Unitech Limited, and another, Consumer Case No.346 of 2013, decided on 02.05.2016. Relevant portion of the said case, reads thus:-

“In so far as the question of a remedy under the Act being barred because of the existence of Arbitration Agreement between the parties, the issue is no longer res-integra.  In a catena of decisions of the Hon’ble Supreme Court, it has been held that even if there exists an arbitration clause in the agreement and a Complaint is filed by the consumer, in relation to certain deficiency of service, then the existence of an arbitration clause will not be a bar for the entertainment of the Complaint by a Consumer Fora, constituted under the Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force. The reasoning and ratio of these decisions, particularly in  Secretary, Thirumurugan Cooperative Agricultural Credit Society Vs. M. Lalitha  (Dead) Through LRs. & Others  - (2004) 1 SCC 305; still holds the field, notwithstanding the recent amendments in the Arbitration and Conciliation Act, 1986.  [Also see: Skypak Couriers Ltd. Vs. Tata Chemicals Ltd. - (2000) 5 SCC 294 and National Seeds Corporation Limited Vs. M. Madhusudhan Reddy & Anr. - (2012) 2 SCC 506.] It has thus, been authoritatively held that the protection provided to the Consumers under the Act is in addition to the remedies available under any other Statute, including the consentient arbitration under the Arbitration and Conciliation Act, 1986.”

             Same is the ratio of recent judgment passed by Hon’ble National Commission on 13.07.2017 in case titled ‘Aftab Singh & Ors. Vs. Emaar MGF Land Ltd. & Anr.’ III (2017) CPJ 270 (NC).

            In  view of the above, the plea taken by the Opposite Parties, that in the face of existence of arbitration clause in the Agreement, to settle disputes between the parties through Arbitration, in terms of provisions of Section 8 (amended) of 1996 Act, this Commission has no jurisdiction to entertain the consumer complaint, being devoid of merit, is rejected.

16.        Another objection raised by Counsel for the Opposite Parties was that since the complainants did not buy goods and did not hire any services, and were seeking enforcement of the Agreement in respect of immovable property, therefore, only a Civil Court can decide the complaint, and consumer complaint was not maintainable. It may be stated here, that the complainants hired the services of the Opposite Parties, for purchasing the unit, in question, in the manner, referred to above. According to Clause 13.3 of the Agreement, subject to force majeure conditions and reasons, beyond the control of the Opposite Parties, it was to hand over possession of the apartment, in question, within a period of thirty months, from the date of execution of the same (Agreement) or approval of building plans and/or fulfillment of the preconditions, whichever is later (commitment period).  Section 2 (1) (o) of the Act, defines service as under:-

“service” means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both,  housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service”

 

 

 

 

17.        From the afore-extracted Section 2(1)(o) of the Act, it is evident that housing/construction, also comes within the definition of a service. In Narne Construction P. Ltd., etc. etc. Vs.  Union Of India and  Ors. Etc., II (2012) CPJ 4 (SC),  it was held that when a person applies for the allotment of a building or site or for a flat constructed by the Development Authority and enters into an agreement with the Developer, or the Contractor, the nature of transaction is covered by the expression ‘service’ of any description. Housing construction or building activity carried on by a private or statutory body constitutes ‘service’ within the ambit of Section 2(1)(o) of the Act. Similar principle of law, was laid down, in Haryana Agricultural Marketing Board Vs. Bishambar Dayal Goyal & Ors. (AIR 2014 S.C. 1766). Under these circumstances, the complaint involves the consumer dispute, and the same is maintainable. Not only this, Section 3 of the Act provides an alternative remedy. Even if, it is assumed that the complainants have remedy to file a suit in the Civil Court, the alternative remedy provided under Section 3 of the Act, can be availed of by them, as they fall within the definition of ‘consumer’, as stated above. In this view of the matter, the objection of the Opposite Parties, in this regard, being devoid of merit, must fail, and the same stands rejected.

18.        The next question that falls for consideration, is, as to whether, this Commission has territorial jurisdiction to entertain and decide the complaint or not. According to Section 17 of the Act, a consumer complaint can be filed, by the complainants, before the State Consumer Disputes Redressal Commission, within the territorial Jurisdiction whereof, a part of cause of action arose to them. In the instant case, it is evident from Clause 33 of the Agreement, that the parties had agreed that “Hence this Agreement shall be deemed to have been executed at Chandigarh even if the Proposed Allottee has prior thereto executed this Agreement at any place(s) other than Chandigarh”, meaning thereby that the Agreement in question, was deemed to be signed/executed at Chandigarh. Not only this, receipts dated 14.09.2011, 04.11.2011, 16.01.2012, 29.02.2012, 01.03.2012, 03.05.2014, 03.05.2014 and 11.11.2014 (Annexures C-1, C-3, C-4, C-5, C-6, C-7, C-8 and C-9 respectively) were issued by Opposite Party No.1 to the complainants, from its Chandigarh Office i.e. SCO 6-7-8, 1st & 2nd Floors, Sector 9-D, Chandigarh. Since, as per Clause 33 of the Agreement and the documents, referred to above, a part of cause of action arose to the complainants, at Chandigarh, this Commission has got territorial Jurisdiction to entertain and decide the complaint.

19.        No doubt, in the written version, an objection was also taken by the Opposite Parties, that as per Clause 36 of the Agreement, the Courts at Mohali and the Punjab and Haryana High Court at Chandigarh, shall have Jurisdiction, to entertain and adjudicate the complaint, and, as such, the Jurisdiction of this Commission was barred. It may be stated here that all the provisions of the Code of Civil Procedure are not applicable, except those, mentioned in Section 13 (4) of the Act, to the proceedings, in a Consumer Complaint, filed under the Act. For determining the territorial jurisdiction, to entertain and decide the complaint, this Commission is bound by the provisions of Section 17 of the Act. In Associated Road Carriers Ltd., Vs. Kamlender Kashyap & Ors., I (2008) CPJ 404 (NC), the principle of law, laid down, by the National Commission, was to the effect, that a clause of Jurisdiction, by way of an agreement, between the Parties, could not be made applicable, to the Consumer Complaints, filed before the Consumer Foras. It was further held, in the said case, that there is a difference between Sections 11/17 of the Act, and the provisions of Sections 15 to 20 of the Civil Procedure Code, regarding the place of jurisdiction. In the instant case, as held above, a part of cause of action arose to the complainants, within the territorial Jurisdiction of this Commission, at Chandigarh. In Ethiopian Airlines Vs Ganesh Narain Saboo, IV (2011) CPJ 43 (SC)= VII (2011) SLT 371, the principle of law, laid down, was that the restriction of Jurisdiction to a particular Court, need not be given any importance in the circumstances of the case.

20.        In Cosmos Infra Engineering India Ltd. Vs Sameer Saksena & another I (2013) CPJ 31 (NC) and Radiant Infosystem Pvt. Ltd. & Others Vs D.Adhilakshmi & Anr I (2013) CPJ 169 (NC) the agreements were executed, between the parties, incorporating therein, a condition, excluding the Jurisdiction of any other Court/Forum, in case of dispute, arising under the same, and limiting the Jurisdiction to the Courts/Forums at Delhi and Hyderabad. The National Commission, in the aforesaid cases, held that such a condition, incorporated in the agreements, executed between the parties, excluding the Jurisdiction of a particular Court/Forum, and limiting the Jurisdiction to a particular Court/Forum, could not be given any importance, and the complaint could be filed, at a place, where a part of cause of action arose, according to Sections 11/17 of the Act. The principle of law, laid down, in the aforesaid cases, is fully applicable to facts of the instant case. It may also be stated here, that even if, it is assumed for the sake of arguments, that the complainants had agreed to the terms and conditions of the agreement, limiting the Jurisdiction to the Courts, referred to above, the same could not exclude the Jurisdiction of this Commission, at Chandigarh, where a part of cause of action accrued to them, to file the complaint. The submission of Counsel for the Opposite Parties, in this regard, therefore, being devoid of merit, must fail, and the same stands rejected.

21.        The next question, which falls for consideration, is, as to whether the construction of approximately 70 flats over the existing tower(s) by the Opposite Parties is at the cost of existing common facilities/amenities and against the agreed terms and conditions. Relevant clauses 22.3 and 10.10 in the Apartment Buyer’s Agreement read as under:-

“22.3      The Proposed Allottee agrees that the Company shall be entitled to connect the electric, water, sanitary and drainage fittings on any additional structures/storeyes with the existing electric, water, sanitary and drainage fittings. The Proposed Allottee further agrees and undertakes that it shall not at any time before or after taking possession of the said Apartment, have any right to object to the Company constructing or continuing with the construction of any other building(s)/ structures in IREO-RISE or putting up additional floors to any of the exiting towers/ Buildings in IREO-RISE or undertaking modification of any unsold apartment/units/ areas therein. The Proposed Allottee further agrees that it shall not claim any compensation or withhold the payment of maintenance and other charges, as and when demanded by the Company on the ground that the infrastructure required for IREO-RISE is not yet complete, or on any other ground whatsoever.

 

10.10     The Proposed Allottee hereby expressly agrees and consents that the Company shall have the absolute right to make additional construction, whether on account of increase in FAR or better utilization of the said Land or for any other reason anywhere in IREO-RISE, to the extent permissible by the government or the Competent Authority under the Act. The Company shall have the absolute and unfettered right to transfer such additional construction in any manner whatsoever as the Company may in its absolute discretion think fit. The Company and its transferees of such additional construction shall have the same rights as the Proposed Allottee with respect to IREO-RISE including the right to be member of the Society of Apartment Owners to be formed under the Apartment Act (“RWA”) and the right to use of the Common Areas and other common amenities of IREO-RISE.”

 

             In view of aforesaid, we are inclined to agree with the Opposite Parties that construction of additional flats is in accordance with the specific provision in the Apartment Buyer’s Agreement. The objection of the complainants is, therefore, not tenable. The Opposite Parties are entitled to raise construction of additional flats in terms of provisions in the agreement.

22.        The next question, which falls for consideration, is, as to whether the Opposite Parties, by not providing Split AC fittings in all rooms including bedrooms and complete modular kitchen, were deficient in rendering service. As per Annexure I, the Opposite Parties were to make provision for Split AC and modular kitchen. The provision and specifications, so mentioned in Annexure-I appended to the Agreement, at Pages 65 and 66 of the file, qua the aforesaid two facilities, are extracted hereunder:-

 

KITCHEN	MODULAR KITCHEN	Fitted modular Kitchen, SS Sink, CP fittings, provision for RO system, built-in hob/chimney.
	COUNTERTOP	Granite
AIR CONDITIONING		Provision for Split AC in all bedrooms, drawing & dining room.

 

Admittedly, the provision in accordance with the specifications in the Apartment Buyer’s Agreement was not made. It was argued on behalf of the Opposite Parties that it was nowhere agreed that modular kitchen comprising of both upper and lower cabinets/cupboards was to be provided, and that it was nowhere mentioned that portion above the working slab is a must for a modular kitchen. The Opposite Parties cannot draw their own conclusion that modular kitchen would be complete, even if the cup-boards are provided only below the slab. Had it been so mentioned in the specifications, the position would have been different. When it is clearly mentioned that modular kitchen is to be provided, it would mean modular kitchen with cup-boards below and above the slab. The Opposite Parties have also failed to clarify, why the provision of Split AC was not made. Thus, the Opposite Parties are liable to provide modular kitchen with cup-boards upper the slab also and so also the provision for split AC in the bedrooms and drawing & dining room.

23.        The next question, which falls for consideration, is, whether the alleged unilateral act of non-constructing of the drop road is an act of deficiency on the part of the Opposite Parties. They (Opposite Parties), in their written statement have categorically denied the allegation of non-construction of the drop road, in question. It has been submitted that all internal roads including the alleged road would be fully developed as per approved plan. In view of specific averment of the Opposite Parties, we do not find any deficiency on this account at this stage.

24.        The next question, that falls for consideration, is, as to whether there is delay in delivering possession of apartment to the complainants and whether the complainants are entitled to delivery of possession of the apartment. As stated above, according to Clause 13.3 of the Agreement, subject to force majeure conditions and reasons, beyond the control of the Opposite Parties, they were liable to deliver physical possession of apartment, within a period of 30 months, from the date of execution of the same (Agreement) or approval of building plans and/or fulfillment  of   the   preconditions   whichever   is   later (commitment period). The building plans were approved on 18.01.2012 as is evident from Annexure OP-17 i.e. after execution of Buyer’s Agreement on 03.11.2011. Computing 30 months from 18.01.2012, commitment period for handing over possession was up-to 17.07.2014. On account of force majeure circumstances, referred to in the Agreement, the Opposite Parties were entitled to advantage of 180 days grace period after the expiry of commitment period, for unforeseen delays in obtaining the Occupation Certificate etc. from the Competent Authority. In the instant case, the Opposite Parties applied for the Occupation Certificate vide application dated 11.08.2016 (Annexure OP-7) i.e. after expiry of 180 days grace period and the same is still awaited. Therefore, in absence of any cogent evidence or justification to seek extension of 180 days by the Opposite Parties, they were not entitled to advantage of 180 days grace period. Further, advantage of 180 days grace period would have been admissible to the Opposite Parties, had they applied for the occupation certificate during the aforesaid period of 180 days. As stated above, occupation certificate was applied on 11.08.2016, which is still awaited. It is an admitted fact that possession of the unit, in question, has not been offered to the complainants, even either expiry of 180 days or after expiry of extended delay period of 12 months, or by the date of filing the instant complaint, or even till date, for want of basic amenities at the site. The Opposite Parties have also failed to place on record, any cogent and convincing evidence, that construction of the unit is going to be complete in the near future. The Opposite Parties were, therefore, duty bound to hand over possession within 30 months i.e. by 17.07.2014. Admittedly, the Opposite Parties have not yet received the occupation certificate. The Counsel for the Opposite Parties could not give any firm date, by which the Opposite Parties would be handing over possession. Clearly there is delay in delivering possession. By making a misleading  statement, that possession of the unit, was to be delivered within the period as discussed above, and by not abiding by the commitment made, they (Opposite Parties) were not only deficient, in rendering service, but also indulged into unfair trade practice. The complainants are certainly entitled to physical possession of the unit, in question.

25.             The next question, that falls for consideration, is, as to whether, the complainants are entitled to compensation, if so, at what rate, for delay in delivering physical possession of the unit beyond the time stipulated in the Agreement. It may be stated here that in case titled Capt. Gurtaj Singh Sahni & anr. Vs Manager, Unitech Limited & anr., consumer complaint bearing no.603/2014, decided on 02.05.2016, the Hon'ble National Commission, directed the opposite party/builder to pay interest  on the deposited amount, for the period of delay, till delivery of possession of the unit. Relevant contents of the said order reads thus:-

“8.   If the compensation for the delay in construction is restricted to what is stipulated in the Buyers Agreement, there will be no pressure upon the builder to complete the construction since he will be more than happy to keep on paying paltry compensation of about 3% per annum of the capital investment, instead of arranging funds at much higher cost, to complete the construction.

9.      xxxxxxxxxxxxx

10.    For the reasons stated hereinabove, the complaints are disposed of with the following directions:

(1)         xxxxxxxxxxxxxx

(2)     The opposite party shall pay compensation in the form of simple interest @ 12% per annum from the expected date of possession till the date on which the possession is actually offered to the complainants after completing the construction in all respects and obtaining the requisite completion certificate.

(3)   No separate compensation would be payable to the complainants either towards the rent if any paid by them or for the mental agony and harassment which they have suffered on account of the failure of the opposite party to perform its contractual obligation.”

26.        No doubt in the Buyer’s Agreement, some scope for delay due to unavoidable circumstances was kept in mind, for compensating the complainants for delay, but it does not mean that even in the event of inordinate delay, that too without justified reasons, in completing the construction and delivering the possession, the complainants would be entitled to meagre compensation of Rs.7.50 per sq. ft. of super area, which is much less than the bank rate for loan or fixed deposit. If the argument of the Opposite Parties is to be accepted, it would lead to an absurd situation and would give an unfair advantage to the unscrupulous builder, who might utilize the consideration amount meant to finance the project, by the buyer, for its other business venture, at nominal interest of 3 to 4 per cent, as against much higher bank lending rates. This could never be the intention of legislation that if such a proposition is accepted, it would result in defeating the object of Consumer Protection Act.

27.        Thus, keeping in view the principle of law laid down by the Hon'ble National Commission, in the case, referred to above, award of interest @12% on the deposited amount for the period of delay i.e. w.e.f. 17.07.2014, till delivery of possession of the unit, would meet the ends of justice.

28.        It was argued by Counsel for the Opposite Parties that out of Rs.49,60,592.00, a sum of Rs.2,89,592.00 was paid by them (Opposite Parties). The contention is not tenable in view of reasons/position stated hereinafter. The Opposite Parties in Para 6 on merits, in their written statement, have admitted that complainants availed the Subvention Scheme of the Opposite Parties while availing loan facility from HDFC, according to which, the Opposite Parties undertook to pay the interest to the said Bank. It is noted from FRIL calculation (Annexure OP-13) that while disbursing a sum of Rs.14,65,335/- on 23.02.2012, discounted amount in the sum of Rs.2,89,592/- was received by HDFC out of Rs.14,65,335/-, which was apparently by way of an arrangement between the Opposite Parties with HDFC on account of which the Opposite Parties got benefit of discounted rate of interest @9.30% against subvention rate of 10.75% for a period of two years from 23.02.2012 to 01.02.2014. For all intents and purposes, liability of complainants to repay to HDFC was for a sum of Rs.14,65,335/-. The Opposite Parties issued receipts dated 29.02.2012 and 01.03.2012 to the complainants for a total amount of Rs.14,65,335/- (Rs.11,75,743.00 + Rs.2,89,592.00) (Annexures C-5 and C-6). The averment of Opposite Parties in Para 6 of their written       statement that the complainants did not pay the          sum of Rs.2,89,592.00, is not correct when they have themselves admitted that receipt dated 01.03.2012 (Annexure C-6) was issued to the complainants. Not only this, as per account statement (Annexure OP-11), amount received from the complainants is in the sum of Rs.49,60,592.00 which included a sum of Rs.2,89,592/-. Thus, as per evidence on record, the sum of Rs.2,89,592/- was part and parcel of installment of loan in the sum of Rs.14,65,335/- disbursed on 23.02.2012 against loan raised by the complainants (Annexure OP-13), demand for which was raised by the Opposite Parties vide demand note dated 27.01.2012 (Annexure OP-12). The plea of the Opposite Parties is not sustainable and the same is hereby rejected.

29.             The next question, that falls for consideration, is, as to whether, the complainants are entitled to compensation, under Section 14(1)(d) of the Act, on account  of mental agony and physical harassment, and injury caused to them, by not delivering physical possession of the unit to them, by the Opposite Parties, by the promised date in the Agreement i.e. by 17.07.2014. The complainants purchased the unit, with the hope to have a roof over their head alongwith family members  but their hopes were dashed to the ground. Even the possession of unit, in question, has not been offered to them (complainants), till date by the Opposite Parties, what to speak of delivery thereof. The complainants underwent a lot of mental agony and physical harassment, on account of the acts of omission and commission of the Opposite Parties. Delay of more than three years in delivering possession is a clear act of deficiency on the part of the Opposite Parties and loss to the complainants. However, the compensation in the sum of Rs.10 Lacs claimed by the complainants is clearly on the higher side. The complainants, in our considered opinion, have been adequately compensated by granting interest @12% per annum on the deposited amount for the delay period. In addition, they (complainants) will also get the benefit of escalation in the price of unit, in question. In these circumstances, compensation, on account of mental agony and physical harassment, caused to the complainants, if granted, to the tune of Rs.1,50,000/-, shall be reasonable, adequate and fair. The complainants, are, thus, held entitled to compensation, in the sum of Rs.1,50,000/-.

30.        No other point, was urged, by the Counsel for the parties.

31.         For the reasons, recorded above, the complaint is partly accepted with costs. The Opposite Parties, are jointly and severally, held liable and directed as under:-

1. To hand over physical possession of  the unit, allotted in favour of the complainants, complete in all respects, including modular kitchen with cupboards above the slab also and provision for Split AC in all bedrooms, drawing & dining room, to the complainants, within a period of three months, from the date  of receipt of a certified copy of this order, on payment of the amount, legally due against them.
2. To execute and get registered the sale deed, in respect of the unit, in question, within one month from the date of handing over possession, as indicated in Clause (i) above, on payment of Stamp-duty, registration charges and incidental expenses etc., by the complainants.
3. To pay compensation, by way of interest @12% p.a., on the deposited amount, to the complainants, from 18.07.2014 to 30.09.2017, within 45 days, from the date of receipt of a certified copy of this order, failing which, the said amount shall carry penal interest @15% p.a. instead of 12% p.a. from the date of default , till realization.
4. To pay compensation by way of interest @12% p.a. on the deposited amount, due to the complainants w.e.f. 01.10.2017, onwards (per month), till possession is delivered, by the 10th of the following month, failing which, the same shall also carry penal interest @15% p.a., instead of 12% p.a.,  from the date of default, till payment is made.
5. To pay compensation, in the sum of Rs.1,50,000/- (Rupees One Lac and Fifty Thousand only) on account of mental agony and physical harassment, caused to the complainants, and Rs.35,000/- as cost of litigation, to the complainants, within 45 days from the date of receipt of a certified copy of this order, failing which, the same shall carry interest @12% p.a., from the date of filing the complaint till realization.

 

32.        Certified Copies of this order be sent to the parties, free of charge.

33.        The file be consigned to Record Room, after completion.

Pronounced.

24.08.2017.

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

[DEV RAJ]

MEMBER

 

 

 

[PADMA PANDEY]

 MEMBER

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