DR.INDER JIT SINGH, MEMBER

1.   The present Consumer Complaints (CCs) have been filed by the Complainants against the opposite parties as detailed above, inter aila praying for directing the OPs to:-

1. refund of principal amount with interest @18% p.a.   

2. compensation for harassment, mental pain and agony suffered and sustained by the complainants.

(iii)          litigation cost. 

2.       Since the facts and question of law involved and the reliefs prayed for in these complaints are similar/identical and against the same Opposite Parties except for minor variations in the dates, events and flat numbers etc., which are summarized in the Table in para 6 below, these complaints are being disposed off by this common order. However, for the sake of convenience, Consumer Complaint (CC) No. 1087 of 2019 is treated as the lead case and facts enumerated herein under are taken from CC/1087/2019.

3.       It is averred/stated in the complaint that:-

i)     The brother of Complainant No.1, namely, Shri Mohan C. Lakhiani and other family members (original allottees), bought flat in the in the Project launched by the OP namely, “Emerald Bay” situated in Sector 104, Village Dhanwapur, Tehsil & District Gurgaon, Haryana.  Upon making requisite payment the original allottees were allotted Apartment No. 1803, having super area of 1700 sq.ft. on the 18^th Floor of Tower No. B-1 (Unit). On 16.09.2013, the original allottees, OP-1 and the Complainants made the necessary endorsement in the Builder Buyer Agreement, whereby the OP-1 approved the nomination of the Complainants in place of the original allottees. On 12.02.2014, the original allotees executed a Transfer Deed in favour of the present Complainants, whereby the right title and interest in the Unit was transferred to the complainants. The total consideration for the Unit was Rs.1,70,90,711/-, out of which, the complainants paid Rs.1,66,62,514/- to OP-1 between 2013-2015. The OPs were liable to handover the possession of the Apartment within 48 months from the date of Agreement, i.e. by 29.10.2017.

ii)    The complainants paid 97% of the total consideration amount as demanded by the OP-1 from time to time expecting that construction of the apartment will be completed on time.  But the complainants came to know that the construction of the Unit is still not complete, even after a lapse of such a long time.  

iii)   After receiving 97% of the total sale consideration for the apartments from most of the allottees, OPs have, without informing these allottees (including the Complainants), mortgaged the entire project including land and structures constructed or to be constructed thereon on first exclusive charge basis in favour of PNB Housing Finance Limited.  The said mortgage has been effected to secure a Loan of Rupees Hundred Crores as per Loan Agreement signed between the OPs and PNB Housing Finance Ltd. This act of OPs has further made the position of all the alloteess of the Project (including the complainants) vulnerable with respect to the legal title of the apartment despite having paid 78% of the total sale consideration amount for the apartment.  The OP-1 filed Form No. CGH-1 with the Registrar of Companies on 02.05.2016.   As per the terms of the Loan Agreement, the repayment is to be done in 18 equated monthly instalments with a moratorium period of 12 months from the first disbursement made by PNB Housing Finance Ltd. around April 2016.  The said clause clearly makes it evident that the OPs do not have the intention to offer the possession of apartments and get the registration done in favour of the allottees any time soon. It further came to the knowledge of the complainants that OP-1 has further raised hundreds of crores of rupees from other financial institutions as well as mortgaging their other projects thereby putting a question mark on the financial health of OP-1 as well as its capacity to execute and deliver the possession of apartments in various projects including the aforesaid project where the complainants booked an apartment.

iv)  The complainants came to know that the OP-1 i.e. Puri Construction Pvt. Ltd. who represented to be constructing the Emerald Bay project is actually not entitled to sell apartments in the project and collect money from the allottees since the license for the project has been issued to OP-2 i.e. M/s Florentine Estates of India Ltd. and in favour of Step Realty, Shri Vijay Kumar S/o Ram Chander etc. 

v)   It is also submitted by the complainants that Section 2(d) of the Haryana (Development & Regulation of Urban Areas) Act 1975 defines the term “Colonizer” to mean an individual, company or association, body of individuals, where incorporated or not owning land for converting it into a colony and to whom a license has been granted under this Act.  Thus, the term defined, requires that a colonizer to be as such under the provisions of the Haryana (Development & Regulation of Urban Areas) Act 1975, must necessarily hold the land in its ownership to apply and get license under Section 3 thereof.  OP-1 is neither owner of any part of the land comprised of “Emerald Bay” project nor any license has been granted by the Director General, Town & Country Planning (DGTCP), Haryana, Chandigarh in its name.  Therefore, OP-1 meets none of the essential conditions of a “Colonizer” as prescribed under Section 2(d) of the Haryana (Development & Regulation of Urban Areas) Act 1975.  It is further pointed out that the DGTCP Haryana has laid down policy parameters for allowing change in beneficial interest viz. change in developer, assignment of joint development rights and/or marketing rights etc. in a license granted under Haryana (Development & Regulation of Urban Areas) Act 1975. It is further pointed out that Rule 17 of the said Rules of 1976 made under the Haryana (Development & Regulation of Urban Areas) Act 1975, prohibits transfer of license without prior  approval of the DGTCP.  Even the beneficial interest, viz. change in Developer, assignment of Joint Development Rights and/or Marketing Rights in a License granted under the Haryana (Development & Regulation of Urban Areas) Act 1975 could not be done without such prior approval.  The DGTCP, Haryana in a response dated 16.08.2016 to a RTI application dated 23.07.2016 filed by Dr. Viresh Arora  (another allottee in the same project) has informed the RTI applicant that License No. 68 of 2012 has been issued in favour of “Florentine Estates of India Ltd., Step Realty Pvt. Ltd., Sh. Vijay Kumar, Lokesh Kumar S/o Sh. Ram Chander.” It has been further informed that no permission has been granted to OP-2 to enter into any Collaboration Agreement with OP-1 in respect of the said license and as such OP-1 cannot sell the apartments in its name.  The above allottee has also filed a complaint CC No. 1598/2017 before this Commission.

vi)  The OPs, under conspiracy and connivance with each other, defrauded and cheated the complainants by usurping the hard-earned money of the complainants from the very beginning of the project.  OP-1 extended false assurance from time to time and sent various demand letters from time to time. The OPs are not only indulging in unfair trade practices but are guilty of rendering deficient services to the complainants.  Neither the OP-1 has given any satisfactory response regarding the completion of construction of the apartment nor the OP-1 refunded the amount to the complainants. The OPs have miserably failed to adhere to the terms of the BBA and application form by not completing the construction and providing possession  of the apartment.  Hence, the complainants filed the present complaint.

4.       The OP in their written statement/reply stated that :-

1. the complaint is not maintainable as the complaint has been filed after expiry of five months after the offer of possession of the unit.  The OPs have already discharged all their obligations under the BBA before filing the complaint and breach of the agreed terms is on the part of the complainants. It is also contended that the complainants entered into a transaction for commercial purpose and not for own use.  As per the KYC documents submitted by the complainants, the complainants are permanent resident of Mumbai and the present booking of apartment made in the city of Gurugram is nothing but a commercial transaction.  It is also contended by the OP that the prices in the area where the apartment is situated have gone down, hence, the complainants want to exit the project, just to avoid financial losses. The OP obtained OC on 21.11.2018.  In the details of the relationship inter se complainants, the said relationship is totally false and an absolute lie and neither the complainant is son of complainant No.2 nor there is any female complainant/ allottee hence all the relationship mentioned in the complaint being false, the complaint be dismissed on this ground alone.
2. It is further contended by the OP that the facts that the brother of the complainant No.1 who had other booking also had filed CC/3237/2017 and tasting the success of the said consumer complaint and getting windfall gains in the depressed market conditions, the present complaint has been filed by the complainants to earn interests on their investments. 

3. The complainants have concealed the fact of offer of possession made on 21.01.2019 from the Commission.  The complainants have not mentioned the fact that the OPs have already offered possession nor produced the said document on record and rather wrongfully and falsely alleged that construction is still incomplete.

4.  It is contended by the OP that the BBA between the original allottees/transferee of the complainants and the OPs was entered into on 16.09.2013 which was endorsed in favour of the present complainants on 30.03.2014.  The time period to complete the construction and obtain OC was agreed to be 54 months from the date of execution of agreement.  The said time expired on 16.03.2018 and the OP obtained the OC on 21.11.2018.  Hence there was delay of merely 8 months in obtaining the OC. 

5. It is further contended by the OP that no cause of action ever arose in favour of the complainants in as much as no wrong has been committed by the OPs, about which the complainants can raise a grouse.  Hence, the complaint by alleging contrary averments is not permissible in law.  The complainants are defaulters in making the requisite payments as per agreed payment plan.  It is also contended that the construction of the project was completed back in the year 2018 and the OPs have already obtained the OC on 21.11.2018.  Hence, the allegation of giving false and lucrative advertisements in the newspaper falsely advertising that the construction is in full swing in the said project is frivolous and denied. 

5.       Rejoinder and Evidence by way of an Affidavit was filed by the complainants and Evidence by way of Affidavit was filed by the OPs broadly on the lines of averments made in their respective complaint/reply. Written Synopsis was also filed by the Complainants and OPs.

6.       The details of the flats allotted to the Complainants/other relevant details of the case as per records of the case and pleadings of the parties are given in the Table below:-

7.       Heard counsels of both sides.

8.       It is argued by the complainants that OP-1 has mortgaged the entire project including land and structures in favour of PNB Housing Finance to secure a loan which has made the position of the allottees of the subject project vulnerable with respect to the legal title of the apartment.  It is further contended that OP-1 is not entitled to sell the Units in the project and collect money from allottees as the licence for the project has been issued to OP-2.  OP-1 meets none of the essential conditions of a colonizer, and that no permission has been granted to OP-2 to enter into any Collaboration Agreement with OP-1 in respect of said licence and as such OP-1 cannot sell the apartments in its name. It is admitted that the committed date of possession was 16.09.2017 and with a grace period of six months, 16.03.2018. Occupation Certificate was obtained by the OP on 21.11.2018 and possession was offered on 21.01.2019.  OPs have justified the delay by claiming force majeure, stating that even if force majeure reasons are not accepted, the delay is just about 10 months, which is not unreasonable.  Relying on various judgments of this Commission as well as of the Hon’ble Supreme Court, the OP contended that in such circumstances, the complainants are obligated to take possession. As per para 31 of Agreement dated 16.03.2018 signed between the parties, the OPs/company has the right to raise finance and create mortgage of the Unit/Project Land.  The extract of the said para is reproduced below:-

    “31. Company’s right to raise finance

     The Company shall have the right to raise finance/loan from any financial institution/ bank by way of mortgage/ charge/ securitization of receivables or in any other mode or manner by charge/ mortgage of the Said Apartment/Said Building/Said Complex/ Said Land subject to the condition that the Said Apartment/ Villa shall be free from all encumbrances at the time of execution of Conveyance Deed.  The Company/financial institution/bank, as the case may be, may always have the first lien/charge on the Said Apartment/Villa for all their dues and other sums payable  by the Allottee(s) or in respect of any loan granted to the Company for the purpose of the construction of the Said Building/Said Complex”. 

9.       In CC/1088/2019, the complainant is the original allottee but in CC/1087/2019 the complainants are not the original allottees and have got the unit transferred in their name from original allottee Mr. Mohan C. Lakhiani,  vide transfer Deed 12.02.2014.  The complainants have stated in their complaint as well as written arguments that the original  allottee Sh. Mohan C. Lakhiani is the brother of complainant No. 1.  He further states that the complainant No.1 is the son of complainant No.2, whereas complainant No. 3 is the daughter of complainant No. 2.  OP has taken objection to these details of relationship inter se of the complainants as there is no female complainant amongst the three complainants as per memo of parties and the statement of complainants that complainant No.1 is son of complainant No.2, whereas complainant No.3 is daughter of complainant No. 2 does not appear to be correct prima facie.  However, considering that OP has admitted that said allotment has been transferred by them in the name of the complainant on 31.03.2014, without going into the merits of this argument of mistake in the relationship between the complainants, the case is being decided on merits.  The relief ordered, if any, will  be paid by the OP to the complainants, who are the allottees as per their records and subject to due verification by them.

10.     The contention of OPs that this Commission lacks pecuniary jurisdiction is not valid. Under Section 21 of the Act, Commission has the jurisdiction where value of goods and services and compensation, if any, claimed exceeds Rs one crore. The contention that complainants are not the consumers as they purchased the unit for commercial purpose is also rejected as no such evidence has been adduced by the OPs in this regard. The plea of OPs that delay was due to force majeure circumstances is not valid as there is no documentary evidence to support the contention of the Opposite Parties that the reasons pleaded by them, can be construed as ‘Force Majeure.

11.     In the instant case, there is a delay of only 10 months in handing over the possession of flat by the OPs from the committed date, which is not unreasonable.  Hence, the complainants in the present circumstances are obligated to take possession of the flat and the OP is obligated to pay delay compensation for the period of delay.  However, if due to the reason that OP has mortgaged the entire project and/or OP-1 is not entitled to sell the said Units as licence is issued in the name of OP-2, as detailed in preceding paras, the complainants wish to seek refund, they can do so without imposition of any penalties by the OP, and without any interest by OP on their principal amount.

12.   For the reasons stated hereinabove, and after giving a thoughtful consideration to the entire facts and circumstances of the case, various pleas raised by the learned Counsel for the Parties, the Consumer Complaint is allowed/disposed off with the following directions/reliefs: -

CONSUMER COMPLAINT NO.1087 OF 2019

1. OP shall hand over the actual physical possession of the unit in question to the complainants, complete in all respects as per specifications and alongwith all the facilities/amenities as promised in the brochure/agreement within two months of date of this order subject to the complainants paying the balance amount as per agreement, if any, within 30 days of this order.  OP shall also arrange joint inspection of the unit with the complainants/their representative to satisfy them about the completeness of the unit as per the specifications and alongwith amenities/facilities as per brochure/agreement. If any deficiencies are noticed as a result of such joint inspection, the same shall be got rectified within 15 days of date of such joint inspection.  OP shall also be liable to pay delay compensation in the form of simple interest @6% from 16.03.2018 to 21.01.2019.

2. In case the complainants do not wish to seek possession of the flat in question and want refund of their money, they shall make a specific request in writing in this regard, within 30 days of date of this order.  In such a situation, the OP shall refund the entire principal amount of Rs.1,66,62,514/- (Rupees one crore sixty six lakh sixty two thousand five hundred and fourteen only) (without any interest and without imposition of any penalties/forfeiture of earnest money etc.), within 30 days of receipt of such request. The principal amount refundable mentioned in this para is subject to verification of actual amount paid by the complainants based on receipts etc. 

3. The OPs shall pay a sum of Rs.25,000/- as cost of litigation to the    complainants. 

4. The liability of the OPs shall be joint as well as several.

5. The payment in terms of this order shall be paid within two months from today.

6. In case the complainants have taken loan from Bank(s)/other financial institution(s) and the same/any portion of the same is still outstanding, the refund amount will be first utilized for repaying the outstanding amount of such loans and balance will be retained by the complainants.  The complainants would submit the requisite documents from the concerned bank(s)/financial institution(s) to the OP(s) four weeks from receipt of this order to enable them to issue refund cheques/drafts accordingly.

CONSUMER COMPLAINT NO.1088 OF 2019

1. OP shall hand over the actual physical possession of the unit in question to the complainant, complete in all respects as per specifications and alongwith all the facilities/amenities as promised in the brochure/agreement within two months of date of this order subject to the complainant paying the balance amount as per agreement, if any, within 30 days of this order.  OP shall also arrange joint inspection of the unit with the complainant/her  representative to satisfy her about the completeness of the unit as per the specifications and alongwith amenities/ facilities as per brochure/agreement. If any deficiencies are noticed as a result of such joint inspection, the same shall be got rectified within 15 days of date of such joint inspection.  OP shall also be liable to pay delay compensation in the form of simple interest @6% from 29.04.2018 to 21.09.2019.

2. In case the complainant does not wish to seek possession of the flat in question and wants refund of her money, she shall make a specific request in writing in this regard, within 30 days of date of this order.  In such a situation, the OP shall refund the entire principal amount of Rs.1,48,84,498/- (Rupees one crore forty eight lakh eighty four thousand four hundred and ninety eight only) without any interest and without imposition of any penalty/forfeiture of earnest money etc. within 30 days of receipt of such request. The principal amount refundable mentioned in this para is subject to verification of actual amount paid by the complainant based on receipts etc.

3. The OPs shall pay a sum of Rs.25,000/- as cost of litigation to the    complainant. 

4. The liability of the OPs shall be joint as well as several.

5. The payment in terms of this order shall be paid within two months from today.

6. In case the complainant has taken loan from Bank(s)/other financial institution(s) and the same/any portion of the same is still outstanding, the refund amount will be first utilized for repaying the outstanding amount of such loans and balance will be retained by the complainant.  The complainant would submit the requisite documents from the concerned bank(s)/financial institution(s) to the OP(s) four weeks from receipt of this order to enable them to issue refund cheques/drafts accordingly.

13. The pending IAs, if any, also stand disposed off.